Human Decencies in Art and Economics

In an on-line journal, DemocraticUnderground.com, amidst a welter of anti-George W. Bush articles, one addresses a theme, “Prices and Values: Why Economics Fails As a Sole Foundation of Public Policy”, written by Ernest Partridge, of The Crisis Papers.

Near its end – a familiar disquisition on the inequities of ‘cost-benefit analysis’ – there is the following:

“… the marketplace can obscure Adam Smith's essential distinction between "values in use" and "values in exchange."
"The things that have the greatest value in use," Smith writes, "have frequently little or no value in exchange; and on the contrary, those which have the greatest value in exchange have frequently little or no value is use." As examples, Smith cites diamonds, which have little value in use but great value in exchange, and water which has effectively infinite value in use (we can not survive without it), but very little cost (exchange value). Significantly, "environmental values" such as clean air and water tend to be "values in use," and thus greatly undervalued in markets.”

Apart from the observation that water may be about to be transformed into a commodity of much greater value than hitherto as world demand presses against available supply, it is a familiar debate, shadowed by the debate about the value of art and access to art (in its most general sense) and why taxpayers should subsidise more of it.

Cost Benefit Analysis CBA) post-dates Adam Smith, of course, and is one of many tools designed in the 20th century to assist (not dictate) decision-making between alternative uses of scarce funds. The debate on the usefulness of economic concepts long preceded CBA.

In the 19th century there were the furious, bad tempered assaults on economics as a subject and a science by such as Thomas Carlyle (an outright racist who believed Africans were meant to be slaves), John Ruskin (who had similar racist sympathies, as well a an artistic hand in designing wallpapers) and Charles Dickens, whose accounts of English life were believed in total by 20th-century Soviet readers as indicative of life in 20th century capitalist countries (would than Soviet citizens could have ‘suffered’ the opulence of capitalist countries, instead of enjoying the rigours of socialist planning).

In terms of style, the anti-economists, won hands down. The ‘dismal’ economists were lambasted for believing and expressing, without evidence of literary and artistic style, a sound humanist belief in the equality of mankind; they opposed slavery (going back to Adam Smith) and tended (Smith and J. S. Mill) to sympathise with the working man and their families, seeing economic growth as the route to opulence. They didn’t need CBA to know that it was better to be opulent than to be poor, or worse, in slavery to be wretched and helpless beyond belief.
The men of letters, who knew the real value of everything and despised the price nexus, had nothing to offer the labouring poor or slaves. That they despised the capitalist entrepreneurs (and to be fair, many of them were despicable) means they despised the very people in society who would help liberate the poor from poverty (real wages were rising steadily in the UK, including among those in ‘Dark Satanic Mill’ country, and continued to do so into the 20th century) and also the people who would lead the moral campaign against slavery.

What this suggests is that political economy should take a broader view of society than its money wealth – a position endemic in Adam Smith’s work – and its civilising arts. Smith was closely interested in the Arts and some of his writings, unfortunately neglected and which he did not complete, show a man as passionate about poetry, plays and literature as much as he was passionately opposed to those mercantile policies that kept the poor and disadvantaged (and the already rich and privileged) in the status they were born into and from which there was little chance of escape.

Smith, an able mathematician, able in his day to discuss abstract theorems from geometry with Scotland’s finest professors of mathematics, by their own account, would not have been comfortable at all with the dead-end into which economics has been diverted in the past 100 years. He would have regarded all mathematical tools, no matter how complex, as aids to understanding, not dictates of policy choices.

We do not have to choose one or the other; it is not Value versus Use or Art versus Science. Add what Smith called the human decencies or common humanity to economics and you get as close to his actual legacy as it is possible to be, which is a long way from image he has been given by those who despise science in the name of Art, as well, in the sad cases of Carlyle, Ruskin and Dickens, who seemed to despise some of their fellow human beings as being fit for slavery, a charge nobody could lay against Adam Smith, or John Stuart Mill.