And Not Just in the Tabloids

Quite a flurry among the chattering classes and their tabloid cousins is underway over the mostly innocuous issue of Adam Smith’s image on the forthcoming £20 note.

The Independent, a London newspaper that runs daily front pages covered in full-size bad news about Iraq, the environment, the state of Britain and anything else that reflects on the government, and Tony Blair in particular.

Today, Mary Dejevsky writes on what she considers to be: “The Big Question: Who was Adam Smith, and does he deserve to be on our banknotes?”

Two sentences caught my attention (much of the rest is tediously tendentious too, but enough is enough):

“One of his central arguments was that pursuit of individual self-interest had the effect of advancing the common good - which was later interpreted by some as providing a justification for selfishness.”

“An equally suspicious mind could see the summary of Adam Smith's thoughts on the division of labour, to figure beside his portrait, as propaganda for capitalism.”

Comment
Individual self-interest could have the effect of advancing the ‘common good’, but it could have exactly the opposite in that it was intended only to advance the self-interest of the monopolist, the beneficiary of tariff protection, the guild member, the bank fraudster, the criminal, the dominance of a particular church, or interest group, the combination of employers, the trivial national interests of petty princes fighting expensive wars for vain glory, or whatever. Indeed, Smith gives so many examples of malign self-interest it is a wonder of modern psychology that so many can ignore Smith’s consistency on the potential for malign outcomes and still arrive at exactly the opposite conclusion to Smith, while claiming he agreed with them!

On the matter of the division of labour being seen ‘as propaganda for capitalism’, there is a particular irony. The division of labour did not start with capitalism (an economic system that post-dates Smith’s death in 1790). Apart from Plato writing about the division of labour, and others before Smith, it was described by Smith as beginning way back in ‘savage’ society when, in his ‘story’, an arrow maker swapped spare arrows for a share in the hunter’s kills.

Now, if anybody argues that I am wrong and that ‘capitalism’ came after Smith, nobody may argue with justice or conviction that ‘capitalism’ governed the exchange of arrows for meat many hundreds of thousand years ago. Smith suggested that the human propensity to ‘truck, barter, and exchange’ was occasioned by the ‘faculties of reason and speech’, an evolutionary event that places the consequent division of labour (Smith considered them to be linked) during the time of the hominids and before Homo sapiens speciated around 200,000 years ago, and not around 1830.