| Author(s): | Rothschild, Emma
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| Reviewer(s): | Hueckel, Glenn
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Published by EH.NET (September 2002)
Emma Rothschild, Economic Sentiments: Adam Smith, Condorcet, and the
Enlightenment. Cambridge, MA and London: Harvard University Press, 2001.
ix + 353 pp. $50 (hardcover), ISBN: 0-674-00489-2; $18.95 (paper), ISBN:
0-674-00837-5.
Reviewed for EH.NET by Glenn Hueckel, Department of Economics, Pomona College.
This is a book that will itself provoke in its readers a number of
“sentiments,” chief of which will be, no doubt, what Smith would have
described as a “sense of wonder” at the breathtaking range of the author’s
learning. Her exposition carries us beyond the works of the two authors in the
staring roles, beyond even those of the two chief supporting actors (Hume for
Smith; Turgot for Condorcet), to commentaries on Greek tragedies, studies of
medieval British labor markets, comments on a modern French philosophical
critique of “bourgeois society,” and much more. Indeed, since few
English-speaking readers will be able to measure up to Rothschild’s linguistic
skills, her commentary on a vast French literature, supplemented with
occasional German sources, cannot fail to prompt new lines of thought. The
argument is lavishly documented; her endnotes alone could provide the diligent
scholar with a rich syllabus for a long and highly instructive course of
reading.
The text, however, is a rather different matter. That initial reaction of
“wonder” will be, I fear, quickly tempered by a growing sense of aggravation
and disappointment as readers contemplate the interpretative structure the
author constructs from her sources, particularly as that structure concerns
Smith. Frequently, the reading advanced seems to be conditioned by the needs
of Rothschild’s argument rather than by the content of her sources. This is,
without question, a difficult book. The exposition is highly allusive,
carried along by hundreds of fragmentary quotations that are more tantalizing
than instructive. Not infrequently one longs for a series of simple
declarative sentences where one can get one’s bearings. Nevertheless,
“enlightenment” eventually arrives in the last chapter, where the author
finally makes explicit her organizing structure.
That structure is best described as comprising three layers of varying degrees
of complexity. At the simplest, most descriptive level, the author seeks to
“cast light” on her notion of eighteenth-century enlightenment. For this
purpose, the object of our attention is to be understood as “a universal, or
potentially universal disposition; … not a characteristic only of
philosophers,” but “a particular disposition of everyone.” This is a
disposition to “a discursive, disputatious, theorizing way of life” which
infuses all areas of existence, particularly the political and commercial
spheres (which, as the author is at pains to point out, are themselves
interrelated) (pp. 16, 31, 39, 49). It is at this level that the argument is
most instructive. The ideas of her authorities fit easily into this scheme,
and the arrangement reveals a number of fascinating insights that will enrich
our understanding of those authorities.
It will be evident from the book’s title that our attention is to be directed
at those enlightenment authors who were roughly a generation younger than
Quesnay and his physiocratic contemporaries. This is an important distinction
since that earlier generation has been criticized for the authoritarian stance
of their political views, a sort of “compulsory enlightenment” in which the
state was to shape the spirit of its people in the philosophers’ image of the
“laws of nature.” Indeed, our authors — Condorcet and Turgot; Smith and Hume
— were among those critics. The failure to maintain this important
distinction in the post-Revolutionary world led, we are told, to the false
portrayal of Smith and Condorcet as expressing that same “cold, rational, and
reflective calculation” associated with the previous generation of
Enlightenment writers in contrast to that “warmth” of sentiment said to
characterize post-Napoleonic thought (pp. 25-28; 34-39).
The author’s first objective is to rescue the reputations of Condorcet and
Smith from this frigid characterization. The task is accomplished for
Condorcet in chapters 6 and 7, the latter of which is slightly revised from
its earlier version appearing in the Historical Journal, 39.3
(September 1996): 677-701. These demonstrate quite satisfactorily that his
“principles … are strikingly different from the cold, unfeeling, all-summing
‘mechanical philosophy’ which is supposed to be characteristic of the French
enlightenment” (p. 212). His world not only permitted diversity of opinion but
encouraged it. Indeed that diversity is to be seen as “of central importance”
to the analysis of voting procedures that led to his famous conclusion that
aggregation of individual choices by majority vote will, under certain
circumstances, produce intransitive outcomes. Condorcet’s solution to the
problem was to envision constitutional procedures to manage that “political
dissonance” by encouraging “deliberation, delay, and the prospect of
reversibility.” His citizens would “vote interminably” on “everything from
property rights in ponds to the future constitution of representative
government” (pp. 188-89; 198-99; 204-05; 219-20).
In Smith’s case, the rescue occurs in chapter 2, which, like chapters 3 and 7,
is very slightly revised from an earlier publication (in the Economic
History Review, 1992, 45.2: 74-96). Here the problem is to explain how
Smith’s expansive views on “natural liberty” could come, within a decade of
his death, to be compressed in the minds of his countrymen to no more than a
narrow call for commercial freedom. Here the argument introduces us to the
oppressive social atmosphere in Britain of the 1790s, when widespread fear
that the terrors of the Revolution might be exported across the Channel made
very unpopular any discussion of reform, or even expressions of anything less
than wholehearted support for the war with France. We are reminded that
Stewart, Smith’s first biographer, read his “Account” of Smith’s life to the
Royal Society of Edinburgh at just the time when several of his countrymen
were on trial in the same city for sedition, for which they were eventually
convicted and transported. Some even appealed in their defense to the views
expressed in The Wealth of Nations, which, no doubt, made Smith’s less
reckless readers very nervous. Indeed, Stewart himself fell afoul of the
contemporary sensibilities a year later and was constrained to repudiate what
seems to modern eyes a very mild quotation from Condorcet included in an
earlier work. No wonder Stewart was at pains in his “Account” to distinguish
commercial freedom alone as conducive to national wealth, assuring his hearers
that the freedom of widespread political participation is not, in all cases,
necessary to the “happiness of mankind” (Smith, 1980, p. 310). It is, of
course, obvious that the reception and interpretation of an author’s work will
be influenced by the political and social environment of the time. Rothschild
has here given us a fascinating picture of how that environment influenced the
reception of Smith’s work in the 1790s. A similar story is told in chapter 4,
which contrasts Smith’s criticism of apprenticeship with the arguments
advanced in the debates leading to the 1814 repeal of the apprenticeship
clauses of the Elizabethan statute of artificers. Here too we see in detail
how the participants in those debates carefully chose from among Smith’s
broader arguments to support their own narrower purposes. These and the
intervening chapter 3 may well be the best in the book.
That intervening chapter (appearing in a shorter version in the Economic
Journal, 1992, 102.414: 1197-1210), completes the effort to rescue
Condorcet and Smith from that “cold” and “unfeeling” version of the
Enlightenment. Here we are concerned with the teachings of our authorities
regarding the grain trade because, we are told, “The political economy of food
has been an emblem, at least since the 1760s, of the heartlessness of the
liberal system” (p. 72; the like point is made with particular reference to
Smith on p. 61). Rothschild, however, is at pains to convince her readers that
Condorcet, Turgot, and Smith all “argued that free trade in corn is the best
means to avoid famine” (pp. 73-74). This will come as no surprise to
economists; but her brief survey of the arguments contained in Turgot’s
“Lettres” and Condorcet’s R?flexions on the grain trade (which, apart
from some brief excerpts from Turgot translated by Groenewegen, are not
available in English) will be of considerable help to scholars interested in
understanding how societies (and economic theory) respond to subsistence
crises.
It should by now be evident that Rothschild’s effort to describe the positions
advanced by her second-generation Enlightenment authors and to trace out how
the perception of those positions changed in the decades immediately following
the Revolutionary period does indeed cast new and revealing light on the
position of those authors in the pre-Revolutionary intellectual firmament.
About midway through the book, however, the argument shifts away from this
descriptive stance and turns ever greater attention to an evaluation of that
“liberal economic thought” associated with those authors. By the end of the
fifth chapter we are confronted with what Rothschild insists are the two
“shortcoming[s] of the liberal economic order.” The first is its alleged
failure to acknowledge “that individuals seek, on occasion, to pursue their
own (economic) interests by political means.” The second is the “inconstancy”
of that “liberal order.” The institutions comprising the world described by
Condorcet and Smith, being “the outcome of innumerable, unruly judgments, …
may or may not be good.” In this respect that structure “is very unlike a
divine providence … in which individuals should have confidence.” Or, as
the point is expressed in the last chapter, this “more insidious shortcoming
of the liberal orders … is that they do not contain within themselves the
sources of their own improved orderliness.” If, in their intellectual systems,
our authors deny the existence of a “divine providence” looking after things,
then they can have no certainty that those “innumerable, unruly judgments”
will lead to “improved orderliness” (pp. 157-58; 219-20). This uncertainty
provides the third facet of Rothschild’s organizational structure. As she puts
it on the penultimate page of her text, she “has been concerned in this book
with an economic thought in which uncertainty is the overwhelming condition of
commercial society.”
It must be admitted that this theme of “uncertainty” appears frequently in
various brief obiter dicta throughout the book, but the precise nature
of the “uncertainty” that is supposed to be at issue is not made explicit
until the last chapter. There it takes several forms, ranging from the trivial
to the profound. At its most mundane level, it is no more than normal market
risk: “The world of eighteenth-century commerce was insecure, or risky, in the
sense that it was full of new investments and new economic relationships” (pp.
239-40). Yes, replies the reader, and the same could be said for any other
century. To some degree, the uncertainty that is supposed to be at the heart
of “liberal economic thought” arises from capricious changes in the rules of
the game: “The new world of commerce was insecure, too, because it was subject
to frequent and often sudden changes in laws, regulations, and the
jurisprudence of property” (p. 240). But the key role in the argument is
played by those sources of uncertainty that correspond to Rothschild’s two
“shortcomings” of the “liberal order.” That enlightened disposition to “a
discursive, uneasy, self-conscious way of life” that produced the “political
dissonance” that so occupied Condorcet spills over into commercial life as
well: “The eighteenth-century system of commerce … was subject to continuing
flux not only in events, and in rules, but also in the dispositions of the
individuals … of whom the system is composed.” This “flux in the condition
of men is the essential circumstance of modern commerce, in Smith’s, Turgot’s,
and Condorcet’s description” (p. 241). The individuals who populate the world
envisioned by these authors are said to “have opinions about their own
interests, about the interests of the society, and about the policies which
are likely to promote those interests,” and they recognize that they can
promote their private interests through efforts to influence those policies:
“They are buying and selling, buying and selling; in the end, they are buying
and selling rules, and customs, and their own dispositions.” Apparently this
flaw in the “liberal economic system” is to be understood as a fundamental
internal contradiction and is, consequently, the source of “the system’s own
insecurity”: “The system of economic freedom is founded on the equality of all
individuals, and it is at the same time subversive of equality,” that
subversion arising from “the endless circle in which individuals become rich,
and use their money to buy power, to buy other individuals, and to influence
the ways in which other individuals think” (pp. 239; 245; 251-52). Here,
obviously, we have come to Rothschild’s first “shortcoming.” The connection to
the second is obvious: without the presumption of a benevolent, divine
creator, there can be no certainty that those shifting “dispositions of the
individuals” in the system will lead to a socially desirable outcome. But,
Rothschild insists, the system to which Smith, Hume, Condorcet, and Turgot all
subscribed “is not the sort of order which is directed, like the ‘movements of
nature,’ by an ‘all-wise Being,’ or by a single, unified theory” (p. 230).
Here then is the evaluative framework that Rothschild would have us adopt. It
portrays the social systems envisioned by Condorcet and Smith as infused by
uncertainty in various forms, all arising from the “continuing flux” in the
“dispositions” of a “discursive, disputatious” populace, that perpetual social
“dissonance” operating with no hope of a divine, guiding hand and,
consequently, plagued by the “shortcoming” that its agents might pursue their
private interest through anti-social means. But what of the supporting
argument? Can such a reading be shown to be consistent with the texts under
review? With respect to Condorcet, Rothschild’s evidence is extensive and
largely persuasive. Smith, however, simply will not permit himself to be
forced into this template for it attributes to his work positions that, in
several cases, are directly opposed to those which he actually advanced. At
nearly every point, the argument rests on selective omissions and
misrepresentations of the Smith texts. Consider, as illustration, just those
bearing on Rothschild’s two “shortcomings of the liberal order.”
If, as alleged by that first “shortcoming,” we fail to acknowledge that those
intelligent, “discursive,” “self-conscious,” agents in our enlightened world
will recognize the incentives to pursue their private interests through the
political system, then our only hope for future social improvement is to take
refuge in the hope that those agents will grow in social awareness and form
their own interests to those of society. As Rothschild puts it, the
Enlightenment’s “late eighteenth-century exponents” looked forward to “a
universe of small proprietors, most of whom are sufficiently foresighted to
understand that their own lasting self-interest, which coincides with the
interest of the society, consists in competing by economic means … and not
through political influence” (p. 158). Now, this seems a fair portrayal of
Condorcet’s position, at least as it was near the end of his life. Quoting
from her translation of one of his last texts, Rothschild observes that
Condorcet put his faith in reform. With “better laws, … ‘the interest in
acquiring things by illegitimate means will present itself less often, to a
smaller number of individuals, and in less diverse and less seductive forms'”
(p. 166). Here, no doubt, is the source of Rothschild’s claim of
“uncertainty.” There is nothing in this rendition of Condorcet’s vision to
inspire confidence in future improvement. It is, as Rothschild puts it, no
more than “a probabilistic judgment,” an “expression of confidence in the
disposition of individuals to discuss and to live by principles of morality;
to be mild and moderate, and to feel an increase of humanity, from the very
habit of conversing together” (p. 232). “The only source of certainty in such
a society,” we are told, “is to be found … in domestic virtues and domestic
conversations. … Condorcet … is prepared to defend the softness or
sweetness of modern life; to look forward to the ‘easy virtues’ of a world in
which improvements in education and laws would have made ‘the courage of
virtue almost useless.'” But, and here we see evidence of that second
“shortcoming,” Condorcet “also recognizes the frightening insecurity of such a
world, in which there is no foundation of political order, either in reverence
for divine right, or in fear, or in political virtue” (p. 235). Now, to make
her case, Rothschild must demonstrate the existence of Smithian parallels to
this rather bland, but insecure, Condorcevian society. Hence we are told that
Smith “was confident that there would be very little opportunity for violence
in a free, civilized, commercial society, and little advantage to be derived
from fraud” (p. 244). We are to take it that Condorcet’s “mild and moderate”
agents populate Smith’s world too. At any rate, we read that “Smith’s
political philosophy … is a description of a world without violent conflicts
over political principles, without revolutions, and without certainty” (p.
232). Presumably to echo Condorcet’s praise of the “softness or sweetness of
modern life,” we are assured that, for Smith, the “political virtues are the
virtues of humanity, and they are even, in some circumstances, the virtues of
women”; and we are offered a brief quotation in support: “‘Humanity is the
virtue of a woman,’ Smith wrote in the Theory of Moral Sentiments, and
it … requires ‘no self-denial, no self-command, no great exertion of the
sense of propriety'” (p. 234).
By now, those familiar with Smith’s thought will be writhing in agony. Anyone
who is aware of Smith’s praise for the virtue of self-command (that from which
“all the other virtues seem to derive their principal luster”) will be
suspicious of any suggestion that it can be excluded from the “political
virtues.” The suspicion is confirmed when we take the trouble to check the
citation. Rothschild fails to warn us that the fragment concerning “humanity”
as “the virtue of a woman,” appears as the other half of a contrast with the
character of “generosity.” The meaning of the passage changes dramatically
when we return the fragment to its context: “Generosity is different from
humanity. … Humanity is the virtue of a woman, generosity of a man.” While
it is true that “[t]he most humane actions require no self-denial, no
self-command, no great exertion of the sense of propriety, … it is otherwise
with generosity.” This “masculine” virtue requires the “sacrifice [of] some
great and important interest of our own to an equal interest of a friend or of
a superior.” It is, in other words, the opposite of “humanity” in that it
does require “self-denial.” Now, perhaps Rothschild’s selective omission of
the other half of Smith’s rhetorical contrast could be excused if the omitted
concept was, in Smith’s system, excluded from the “political virtues,” but no
such defense is possible here. In the very next sentence, Smith takes his
illustrations from the fields of political and military conflict: “The man who
gives up his pretensions to an office that was the great object of his
ambition because he imagines that the services of another are better entitled
to it; the man who exposes his life to defend that of his friend, which he
judges to be of more importance; neither of them act from humanity;” rather,
they both exhibit the “self-denial” of “generosity” (Smith 1976b, p. 190-91).
Apparently Smith’s vision does include “conflicts over political principles”
and even battlefield sacrifice. His system contemplates revolution too, but
here that “divine order” supposedly missing from that system interposes
impediments to such violent disruption. As we will see shortly, Rothschild’s
peculiar refusal to acknowledge the role of a divine creator in Smith’s system
is the most puzzling aspect of her argument. The benevolent care of that deity
pervades his Theory of Moral Sentiments. “[T]o raise and support …
the great, the immense fabric of human society,” Smith wrote there, “seems in
this world, if I may say so, to have been the peculiar and darling care of
Nature.” To preserve that social fabric, “Nature” implants in us a disposition
to acquiesce in our rulers even when reason would have it otherwise: “That
kings are the servants of the people, to be obeyed, resisted, deposed, or
punished, as the public conveniency may require, is the doctrine of reason and
philosophy; but it is not the doctrine of Nature.” On the contrary, “Nature
would teach us to submit to them for their own sake.” This disposition to
submit to unjust rulers can apply even in the case “of the most brutal and
savage barbarians, of an Attila, a Gengis, or a Tamerlane.” This is not a
particularly noble characteristic. It arises from our disposition to admire
success and to despise failure even when those outcomes are the product of
chance or force. Nevertheless, even this “great disorder in our moral
sentiments” serves to preserve human society, particularly in the worst of
times. Consequently, “we may on this, as well as on many other occasions,
admire the wisdom of God even in the weakness and folly of man.” It may be a
“foolish admiration,” but by this tendency to admire those who, whether by
chance, by force, or by merit, succeed in achieving positions of political
leadership, the populace “are taught to acquiesce with less reluctance under
that government which an irresistible force imposes upon them, and from which
no reluctance could deliver them.” Where in passages such as these are we to
find any hint of Rothschild’s reading of Smith as envisioning “a world
without violent conflicts over political principles, without revolutions”? At
best, Smith’s world is one in which, by virtue of “the wisdom of God,” only
“the most furious passions, fear, hatred, and resentment … excited [to] the
highest degree” can rouse “the bulk of the people … to oppose [their
leaders] with violence” (Smith 1976b, pp. 53, 86, 252-53).
Nor does Smith’s vision of social order rest on a na?ve “confidence in the
disposition of individuals to live by principles of morality.” The agents who
populate Smith’s world exhibit all the faults we have come to know in fallible
humans. It is true that Smith’s ethics — his “theory of moral sentiments” —
rest on a presumed human capacity and desire to, through our imaginations,
“enter into” the situation of our fellows and to experience to a muted degree
their emotions. But it is also true that Smith was ready to acknowledge that
“self-deceit” — that “fatal weakness of mankind” — that too often prevents
us from checking and condemning behavior in ourselves that we would condemn in
others. Yet the “fabric of human society” requires that we all meet certain
accepted standards of decorum. Once again “Nature … has not left this
weakness … altogether without a remedy; nor has she abandoned us entirely to
the delusions of self-love.” Through our normal social interactions, we form
“certain general rules concerning what is fit and proper either to be done or
to be avoided.” These “general rules of conduct” become “fixed in our mind” by
training and “habitual reflection.” Although “ultimately founded upon
experience of what … our moral faculties … approve, or disapprove of,”
their application does not require that all agents exhibit a finely-tuned
capacity for sympathy in all circumstances. A good thing too since “[t]he
coarse clay of which the bulk of mankind are formed, cannot be wrought up to
such perfection.” It is these general rules or duties that are the proximate
foundation of social order: “upon the tolerable observance of these duties
depends the very existence of human society, which would crumble into nothing
if mankind were not generally impressed with a reverence for those important
rules of conduct.” Finally, lest there be any remaining doubts as to the role
of a benevolent deity in Smith’s system, we are told in the next sentence,
“This reverence is still further enhanced by an opinion which is first
impressed by nature, and afterwards confirmed by reasoning and philosophy,
that those important rules of morality are the commands and laws of the
Deity,” a position which is elaborated on the subsequent pages (Smith, 1976b,
pp. 158-63).
We find in chapter 5 Rothschild’s defense of her claim that Smith’s system
exhibits those two “shortcomings” that she perceives in “liberal economic
thought.” The chapter advances the remarkable position that Smith’s “image of
the invisible hand is best interpreted as a mildly ironic joke” (p. 116; a
very brief summary of the argument appeared earlier in the American
Economic Review, 1994, 84.2: 319-22). This must be the case because “if it
were taken seriously,” the concept expressed by that metaphor “would have been
in conflict with several of Smith’s most profound convictions” (p. 136). What
is at issue here is not simply the metaphor itself but the concept which it is
taken to convey, that concept being, for Rothschild, that the individual
pursuit of private interest can produce an orderly aggregate outcome which
can, under some identifiable circumstances, be socially desirable (p. 121). It
is Smith’s expression of this concept that we are to take as intended as “an
ironic joke … on himself … [and] on his immense posterity as well” (p.
138).
Among those of “Smith’s most profound convictions” with which this concept is
supposed to conflict is his well-known principle that merchants often pursue
their interest through political influence. By Rothschild’s argument, we may
take it that the notion of a spontaneous order conveyed by the invisible hand
metaphor was “un-Smithian and unimportant to his theory” because “Smith’s
criticisms of government and of established institutions are essential to his
economic thought; it is most unlikely that he would simply forget them in a
grand theory of the social good” (p. 128). But this bespeaks a remarkably
narrow reading. Smith did not “forget” his “criticisms” of public and private
institutions in his “grand theory”; they were part of his theory. Rosenberg
(1960) pointed out long ago that those “criticisms” were in fact original and
perceptive investigations of the incentive structures embedded in those
institutions, and the point has only been elaborated since. Rothschild is
quite right (p. 244) that Smith suggested in his jurisprudence lectures that
commercial relationships could improve the character of the participants, at
least with respect to their “probity and punctuality.” But as Rosenberg again
has elsewhere (1990) reminded us, Smith did not stop there. In his vision,
commercial society served to improve not only the character of the people but
also the legal structures that guide their actions and establish their
security of property right. The same philosopher who took account in his
ethics of the “coarse clay of which the bulk of mankind are formed” could not
fail to recognize in his investigation of market behavior that “such, it
seems, is the natural insolence of man, that he almost always disdains to use
the good instrument, except when he cannot or dare not use the bad one”
(Smith, 1976a, p. 799). He was quite aware that the individual pursuit of
private interest must be channeled by properly constructed incentive
structures (which include, of course, not only legal restraints but
competitive markets as well) to prevent recourse to the “bad instrument.” Only
when operating within such structures can we speak of an “invisible hand”
directing individual actions to a socially desirable outcome.
Yet Rothschild insists that there is “something oddly ingenuous in Smith’s
sudden invocation of the timid, virtuous merchant, led by the invisible hand
to pursue only harmonious interests” (p. 128). In violation of her own
injunction to understand the invisible hand reference in its broad, conceptual
sense, she here limits attention to “the invisible hand passage” in The
Wealth of Nations, where the merchant “does not, for example, seek to
collect together with other merchants to obtain special privileges for home
production.” No, not in this passage; but Smith was, no doubt, writing under
the reasonable presumption that his readers can be expected to recall the
countless other passages that warn of such collusion and propose incentive
structures designed to impede it.
Adding further to her portrayal of Smith as playing a sly joke on posterity
with his invisible hand metaphor, Rothschild would have us find it
“interesting … that in a chapter mainly concerned with British restrictions
on imports, Smith’s ingenuous merchant is described as a resident of
Amsterdam, trading in corn from K?nigsberg and fruit from Lisbon; he is a
cosmopolitan figure, far less tempted than any English merchant to pursue his
own advantage through political influence” (p. 128; the point recurs on p.
144). Now, any reader who takes the trouble to review the reference in its
context will find this to be a particularly egregious mischaracterization.
While it is not commonly mentioned, the particular social benefit supposed to
be achieved by the Wealth of Nations appearance of the invisible hand
is a preference for home over foreign investment, a principle that will seem
peculiar to modern readers accustomed to decisionmaking at the margin.
Nevertheless, the principle arises from Smith’s eighteenth-century view of
capital as “setting to work productive labor.” Capital employed domestically
“in purchasing in one part of the country in order to sell in another …
generally replaces by every such operation two distinct capitals.” But in
foreign trade, where one of the transactions occurs abroad, “the capital
employed … will give but one-half the encouragement to the industry or
productive labour of the country.” Hence, that famous invisible hand, which
Rothschild would have us believe is slyly applied by Smith to an Amsterdam
merchant “far less tempted” to pursue his interest through influence in the
British political arena, applies in fact to the domestic merchant who, in
“preferring the support of domestick to that of foreign industry, … intends
only his own security,” and is “in this, as in many other cases, led by an
invisible hand to promote an end which was no part of his intention,” that end
being, in this case, the support of more domestic labor than would have been
accomplished had he traded abroad. That Amsterdam merchant trading between
Prussia and Portugal enters Smith’s story only as illustration of the lower
risk associated with domestic trade by providing the contrast of the greater
“unease” felt by the merchant engaged in foreign trade, where he is “separated
so far from his capital” (Smith, 1976a, pp. 368; 454-56).
This alleged “ingenuous” character of Smith’s invisible hand expression recurs
throughout the rest of the argument and is central to Rothschild’s case for
her first “shortcoming.” Upon its introduction, that “first conflict or
shortcoming of economic thought” is described as having to do with “the
transformation of money into political power” and is illustrated by the claim
that “[i]n Smith’s description of the invisible hand in the Wealth of
Nations, the circumstance that individuals pursue their economic
objectives by political means is largely ignored” (p. 154). It also provides a
spurious point of contrast between Smith and Condorcet, who is described as
“admirably explicit in addressing one shortcoming of liberal economic orders,
to do with the transformation of money into political power, and of political
power into the power to influence markets” (p. 166). All this is no more than
a figment of Rothschild’s misreading of Smith.
The foundation of Rothschild’s second “shortcoming” of “liberal economic
thought” is also to be found in chapter five. There is no denying the
“conception of providential order” long associated with Smith’s invisible hand
metaphor. That association provides Rothschild with one more reason to dismiss
that metaphor as “un-Smithian” — namely the conviction that Smith would have
found “very serious problems” in such a “theology of the invisible hand” (p.
129). However, her argument on this point, for all its lavish citations, is
nearly devoid of textual evidence from Smith himself, apart from the remark
that he frequently made known “his differences with Christian doctrines.”
This, of course, is no more than a red herring. That Smith had little patience
with the positions and practices of the established Christian denominations of
his time is obvious. But it is equally obvious that a deistic faith in a
benevolent creator does not rest on Christian doctrine. In support of her
claim, Rothschild can offer us little more than the statement of her “own view
… that … Smith’s and Hume’s religious opinions were indeed quite close,” a
view that no doubt explains why her case so frequently rests on appeals to
Hume rather than to Smith (e.g. pp. 120, 130, 134-35, 139). One could, of
course, argue (and Rothschild does, in passing) that Smith’s frequent
references to the “all-wise Author of Nature” (some of which we have already
noticed) were no more than a smokescreen intended to avoid the kind of
conflict with contemporary sensibilities that so dogged his friend. But the
frequency and apparent sincerity of those references are far greater than the
minimum necessary to satisfy the local keepers of the public morals. Certainly
Rothschild’s claim that Smith denied “the conception of providential order,”
or employed it as no more than “an ironic joke,” is directly opposed to recent
scholarship on the matter. One wishes that in all her footnotes, she had taken
notice of those studies that, with a good deal more relevant documentation,
manage to advance an opposing view (e.g. Evensky 1998; although it appeared
too late to help Rothschild, interested readers will want to consult Hill 2001
as well).
To be sure, Rothschild does acknowledge the common view that Smith professed
the existence of a benevolent creator and that his position on this matter
derived from the natural theology of Stoic philosophy. But she offers little
in rebuttal beyond the unsupported declaration that he “was influenced by
different Stoic doctrines”; that “[w]ithin the overall Stoic system, … it
was the idea of a providential order … to which Smith was most opposed” (p.
132) As to that, I will simply leave it to those interested to read for
themselves Smith’s own assessment of that “Stoical” system, where he assures
us that, even in our greatest extremity, when, in spite of our best efforts,
events “turn out the most unfortunate and disastrous, Nature has by no means
left us without consolation,” that consolation being drawn “from a firm
reliance upon, and reverential submission to, that benevolent wisdom which
directs all the events of human life, and which, we may be assured, would
never have suffered those misfortunes to happen had they not been
indispensably necessary for the good of the whole” (Smith 1976b, p. 292). Is
this an author who opposed the idea of a providential order?
In spite of its flaws, we can learn a great deal from Rothschild’s work here.
Her command of a vast and complex literature is awesome. She has been
scrupulous in identifying her authorities, and she has opened a number of new
and promising lines for further work. She has reminded us that the forces
unleashed by the French Revolution left their mark not only on the political
and social structures of the period but also on the intellectual structures
that conditioned the discourse of the nineteenth century and, at a remove, of
our own time. She has prompted us to look again at the intellectual
influences running in both directions across the Channel in the immediate
pre-Revolutionary period, and she has identified the sources to do so. No
doubt it is that great promise that heightens the disappointment we feel when
we encounter her efforts to turn those sources to purposes which they simply
will not support.
References
Evensky, Jerry. 1998. “Adam Smith’s Moral Philosophy: The Role of Religion and
Its Relationship to Philosophy and Ethics in the Evolution of Society.”
History of Political Economy 30.1: 17-42.
Hill, Lisa. 2001. “The Hidden Theology of Adam Smith.” European Journal of
the History of Economic Thought 8.1:1-29.
Rosenberg, Nathan. 1960. “Some Institutional Aspects of the Wealth of
Nations.” Journal of Political Economy 68.6: 557-70.
1990. “Adam Smith and the Stock of Moral Capital.” History of Political
Economy 22.1: 1-18.
Smith, Adam. 1976a. An Inquiry into the Nature and Causes of the Wealth of
Nations. Edited by R. H. Campbell and A. S. Skinner. Oxford: Oxford
University Press.
1976b. The Theory of Moral Sentiments. Edited by D. D. Raphael and A.
L. Macfie. Oxford: Oxford University Press.
1980. Essays on Philosophical Subjects. Edited by W. P. D. Wightman and
J. C. Bryce. Oxford: Oxford University Press.
(The author, Emma Rothschild, is a Fellow of King’s College, Cambridge and
Director of the Center for History and Economics, King’s College.)
The reviewer, Glenn Hueckel, is the author of various articles on the history
of economic thought in the seventeenth to the nineteenth centuries.
| Subject(s): | History of Economic Thought; Methodology
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| Geographic Area(s): | Europe
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| Time Period(s): | 18th Century
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