"The Hesitant Hand" by Steven Medema: Review, Part One:

Steve Madema opens his book, The Hesitant Hand, with a Prologue that spells out where he is going with his main theme on the part played by self-interest in society as a whole and how philosophers like Adam Smith and those before him approached the question. With an economy of style he gets down to business quickly.

Smith was not the first, nor the only, philosopher to focus on self-interest. Decades before 1776 (Wealth Of Nations), others had made explicit reference to self-interest. My first slight concern occurs here because Steve associates these interests of others and Smith with laissez-faire, a uniquely French term, which was not mentioned by Adam Smith in any of his works or correspondence, though he was familiar with it from his contacts with the French Physiocrats and their publications.

There is today an assumption that Smith’s preference for competition and reduced interventions of the kind practised by European governments in their mercantile legislative policies was in essence a policy of laissez-faire, which, strictly, it was not. Not all Physiocrats advocated laissez-faire – in fact some of their policies were interventionist, as were some of Smith’s.

It could be argued that such quibbles were outwith the thematic realm of Steve’s book – he wants to get on with his narrative, absent such scholarly niceties – and ordinarily I would agree with him, but just as the term had specific meanings for Vincent de Gournay, who popularised the term in his debate with Colbert, the Finance Minister of Louse XIV (“laissez-faire, laissez- passer”), about freedom from the stifling regulations pertaining to the conduct of commerce in France, it has come to have specific meanings for modern economists of the extreme libertarian school – the absence of government - neither of which can be said to be particularly Smithian in content or application.

However, Steve's Prologue is a masterly entre to what follows, especially in Chapter 1, “Adam Smith and His Ancestors” (5-25). This opens with Adam Smith and “an invisible hand” which would tend to “harmonise individual and social interests” and “attempts by the state to interfere with this would run counter to the national interest”. “Competition”, says Steve, “was hampered on all sides” (5).

Much of the legal structure was inimical to economic growth and this structure was the creation of governments following, or initiating, assertions about appropriate economic policy, mixed with religious or contemporary moral philosophies, from the
Greeks onwards.

Steve marches through this history at a brisk, readable pace, which economists who read the chapter would do well to take on board (or be reminded of). Plato, Aristotle, Aquinas, and the Scholastics, are buried in continuing economic thinking, despite the best efforts of modern economists to purge anything that cannot be modelled mathematically.

Rulers prefer subjects who submit to their rule by identifying their self-interest with the Sovereign, and still today they seek enforcement of their writ where their subjects do not do what is wanted of them (in Britain and the US we have petty bureaucrats, in Iran we have black-clothed thugs on motor-cycles, in Pakistan, police with canes, and China their versions of the Gulag). Learn about the past and you understand the present.

Steve covers Scholastic thinking neatly, with comments on much Christian thinking (the will of God) and how it related to, then, contemporary problems of taxation, the sovereign’s appetite for expenditure, regal lifestyles, monuments to their greatness, and the morality of borrowing (usury debates). Into this mix the self-interest of commoners and crown conflicted (the king debased his currency and his subjects ‘clipped’ it), as they did in debates over private and public property (sound familiar in echoes of the tragedy of the commons?).

As the power of the state increased from the 16th century, Steve notes that the influence of theologians declined and that of merchants rose (11), the latter with a self-interested motive to try to influence government policy, based on the well-known (and perpetuating knack for presenting their otherwise blatant self-interest in terms that appealed to the ‘national interest’, which was of greater concern to the sovereign than the petty wishes of seedy merchants). It was, and still is, the way of the lobbyist.

A small quibble emerges for me in Steve’s assertion that the term ‘mercantilism’ was coined in the 1760s (11); I have always understood that it originated from the German word in late 19th century and transferred to English from the late 19th century.

Of no doubt though, the critique of mercantile policy emerged in the late 18th century, particularly in Smith’s Wealth Of Nations in Book IV. While often presented as a critique of bullion accumulation, it goes much deeper than that, summed as the policies associated with what Hume called ‘Jealousy of Trade’.

Steve’s account of the debate is another example of his masterly exposition style which makes the subject interesting (11-13).

The subject is a clear example of the self-interested actions of individual merchants, in alliance with legislators and those who influenced them, that were, in Smith’s and in others’ view, contrary to the national interest.

Self-interest, clearly, does not necessarily result in some way in the public interest (and it remains a mystery to me why proponents of such a view continue to attribute it to Adam Smith – presumably they have never read Book IV!).

If you are not sure what the issues were (and, regrettably still are today) in the mercantile policy debate, Steve’s exposition will remove all doubts and uncertainties. He quotes from the inimitable Jacob Viner to great effect (13) on the appeal of mercantile advocates to Providence for chauvinistic support for their doctrines.

Moving on to the Physiocrats and the economic policy regime of Jean Baptiste Colbert (1619-83), Steve uses 17th-century France as a case study in all that was wrong with mercantile interventionist policy. He discusses their strong points (identified by Adam Smith, who admired them personally) and their ‘errors’ - the superiority of agriculture (produit net) versus the ‘sterility’ of manufactures. They related their ideas to their version of ‘natural law’. (15) As Steve points out the Physiocratic programme required a strong state led by ‘experts’.

This brings Steve to Adam Smith and his works.
However, apologies (I am supposed to be on holiday, and family demands on my attention interrupt my section on Adam Smith - I shall finish it tomorrow and post it then.

Separation of Church and State

Lee Randall, interviews the co-author of ‘God is Back, How the Global Rise of Faith is Changing the World’, by John Micklethwait (editor of The Economist) and Adrian Wooldridge, Allen Lane (Penguin), in The Scotsman, 19 May, HERE:

“Keeping the faith”

“BACK in 1843, James Wilson, a hat maker from Hawick, founded The Economist, partly to serve as a mouthpiece for his campaign on behalf of free trade. As the magazine's website explains, he shared a special affinity with the economic philosophies of another notable Scot, Adam Smith. I've cornered [John-Micklethwait] to discuss his latest book [God is Back], which explores the interplay between God and politics.

God is Back [is] a thought-provoking exploration of the global rise of faith is changing the world ... the book's chief argument is that in order to understand the politics of the 21st century, you cannot afford to ignore God whether you're a believer or not.

Micklethwait is Catholic, his co-author an atheist:

"Our book is the latest stage of an argument that began in Edinburgh, between David Hume and Adam Smith. Hume favoured an established clergy that had been 'bribed into indolence', whereas Smith was keen to open up the religious marketplace to competition. He argued that you wouldn't get successful religion without competition, because established clergy are always bound to try less hard than people who have to battle for every soul."

The authors found that, at heart, man is fundamentally theocentric – given a chance to believe in God, we will do so. So although some Enlightenment thinkers saw religion as oppressive and unscientific – and prevailing wisdom, especially in Europe, held that as the world became more modern it would become more secular – Micklethwait discovered that instead, with modernity comes pluralism.

"You wind up with the ability to choose your faith, which is why we focus so much on America in the book. One in every four Americans changes faith – that's an amazing statistic. Pluralism also gives you the possibility to not be religious at all. What it does is forces you to make a choice."

The American and French Revolutions are key events, he argues. "The French took the line that the church was bound up with the state and so you couldn't have modern life without overthrowing it. That contrasts with the end of the American Revolution, when nobody felt it was particularly odd having religion around. Americans, in the main, have assumed that the two things can thrive together."

Indeed, America's Constitution, along with the writings of Adam Smith, form the key texts required to understand the "competitive mechanism behind religion's revival", writes Micklethwait. "The First Amendment – 'that Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof' – was actually a compromise between dissenters (who wanted to keep the state away from religion) and more anticlerical sorts... (who wanted the church out of politics). Yet it became the great engine of American religiosity, creating a new sort of country where membership in a church was a purely voluntary activity."

Comment
To fully follow the argument you should use the link (my editing necessarily is severe).

Adam Smith on religion is a controversial subject, worsened by it being almost ignored, despite a long section on the organisation of religious institutions in Wealth Of Nations (Book V), alluded to in Micklethwait’s statements. He suggests that there was an ‘argument’ between Hume and Smith, but I would consider it more the presentation of two alternatives.

Hume, the public sceptic about the revealed religion, and all that went with it, of Christianity, favouring an established church because it could do less harm to free thinking than allowing overly enthusiastic little sects to proliferate and cause trouble if they succeeded, and Smith favouring the weakening of state-enforced beliefs by encouraging a ‘thousand sects’ to proliferate, no one of them large enough to disturb a community’s tranquillity.

It was really an empirical question for both of them; Scotland had a quasi-established church in the many Presbyteries that covered the land, of which the zealots in many of them ruthlessly hunted down whatever they considered to be ‘heresy’ (England, of course, had the Church of England in England and the Episcopalians in Scotland); on the fringes of both countries, there were little sects (Quakers among the most prominent), which conformed to Smith’s model to a small extent – they held sway over small groups of people, but did not overly dominate non-members – they were ostracised by the larger established churches and mainly ‘kept their heads down’.

I am not clear what Mickelthwait means by ‘The French took the line that the church was bound up with the state and so you couldn't have modern life without overthrowing it.’ Revolutions can be messy, but the French Catholic church survived, and survives, as an institution (the church in the French village I live in for part of the year was built in the 11th century).

What is clear that the separation of Church and State in France is absolute and not challenged as it is in the USA. In a recent dispute over the wearing of Muslim headscarves by some young girls to School, the President of France said ‘non’ firmly and quoted the separation of Church and State and its operation , for many years in matters with the Catholic Church. The revolution overthrew the State of Louis XVI, disconnecting the roles of Cardinals, but at grass roots the Church continued, until recently – there are not enough priests to hold mass in every local church.

The problem of state and church in revolutionary America was not a little influenced by the question: which religion could be established given the already fractionated churches in existence. The last thing the new state was religious strife in attempting to force on church on the rest. Hence, Smith’s idea of competing churches struck a chord.

Note: My paper, ‘Adam Smith’s Religiosity: a review of the evidence’ is now completed and will be presented to the History of Economic Society annual conference in Denver, Colorado, in June.

Are We Hard-Wired for Fairness?

I attended a ‘Hume Workshop’ at St Andrew’s University on Wednesday which was peopled by faculty and post-graduate PhD students. Now, I am not an authority on David Hume, though as a Smithian I am familiar with much of his work because he and Smith were close colleagues.

Aaron Garrett (Boston University) presented on ‘Reasoning about morals, from [Bishop] Butler to Hume’, which I found most informative, knowing even less about Butler, whose dispute on the logical proof of God's existence was fascinating, because Aaron wove the philosophies of each man together with the confidence one expects in a faculty presentation. Ezra Macdonald, a postgraduate philosophy student, responded with a slightly nervous stance, but with well thought-out questions and comments, and which Aaron handled with the right tone of encouragement and agreement.

After lunch, James Harris (St Andrews) presented on ‘Hume’s peculiar definition of justice’, to which Jesse Tomalty, postgraduate, St Andrews, responded in a somewhat ‘rapid-fire’ style, but with firm command of her material (I sat two seats away from her at the large table and missed bits of what were her most interesting comments – because of my aged hearing not her content – as she flew through some passages). Her most telling question to James was what was ‘peculiar’ about Hume’s idea of ‘justice’?

The discussion among the faculty and students after each paper was revealing, at least to me. I did not speak in the open sessions but I did ask a couple of questions and made comments in the breaks to speakers and commentators.

It seemed to me that more attention paid to the biographies of philosophers like Hume (and Butler) would elucidate relevant aspects of what made their ideas in the form they published. In fact, I have noticed a tendency, if not a compulsion, of philosophers to focus entirely on the texts and their ‘meaning’ in relation to the ideas of other philosophers, ancient and contemporary, separate from any obvious relationship to their times and circumstances.

For example, in relating Hume on justice to the supposed moral senses, whether innate, as in Hutcheson, or from social experience, as in Smith, a commentator raised the work of behavioural experimenters that showed early signs of an idea of ‘fairness’ in young children in the cry of ‘that isn’t fair’, and in chimpanzees (which caught my immediate attention), in which the chimanzees behaved as if they disapproved of certain actions as a group. I thought the main error here lies in transposing modern concepts into the past, where the same words could have different meanings, such as the idea of distributive justice, which in the 18th century (and for long before, back to classical times) had to do with those who deserved re-distributions by virtue of their evident success socially, not their needs, and such justice did not equate to welfare redistributions to the poor (deserving or otherwise) from the rich in today's welfare capitalism.

It struck me that David Hume’s own position illustrated aspects of the justice debate. Smith taught his students (many of whom were the sons of well-off landowners, including aristocrats) that civil justice existed to defend the property of the rich from the landless poor (Lectures On Jurisprudence; Wealth Of Nations). Another source of the threat to property came from the rich, eyeing a weaker neighbour’s property with ‘avarice and ambition’, hence substantial civil law on inheritance, and the sale of property, characterises Roman Law. The Primogeniture laws were enshrined in statutes.

David Hume, as a second son, was excluded from inheritance of the estate where his widowed mother, and his sister, were excluded by law too. His elder bother, John Hume, inherited the farming estate of Ninewells, Berwickshire; Hume was compelled to seek his fortune for himself. Now, if there had been a dispute, then the justice system would have decided in favour of the existing law of primogeniture (which Adam Smith considered pernicious for the growth of commercial markets, especially when entails were prevalent. Whether this was ‘fair’ was not an issue – Hume’s writings hint at discomfort with the existing law – so the supposed ‘hard wired’ sense of ‘fairness’ is most doubtful, which is a more modern notion.

Also, what is fair is often a locally determined notion. People queue in Britain; they don’t in Italy. Both have different notions of ‘taking your turn’ fairly. Children learn about ‘fairness’ in their families, and, later, in the ‘great school of self-command’. It is not ‘hard-wired’.

I spent a productive time at the seminar, and St Andrew’s philosophy department is to be congratulated for running these seminars and inviting others to them (and the Royal Society of Edinburgh – of which Adam Smith was a founder member in 1783 - thanked for funding them).

Going Back to Tribalism?

Thomas Ivan Dahlheimer writes on “Regaining traditional tribal values and ancestral homelands” on the News for Natives.com Blog HERE [Also; see HERE]:

“The main idea of Adam Smith, the founder of unrestricted capitalism, was the idea that the individual’s pursuit of self-interest should be regarded as the main foundation upon which society benefits as a whole. This is perhaps the central premise of his book, The Wealth of Nations. Prior to the Enlightenment, avarice, or greed, was viewed with contempt as one of the seven deadly sins, but Adam Smith, buttressed with the work of Mandeville, Hume and other avowed atheists, paved the way for greed to be viewed as a natural, and even as a positive thing. This change in values was perhaps one of the most important and profound changes that helped to overthrow Judeo-Christian morality as the foundation of Western civilization.
If our nation’s dominant society, which is a part of Western civilization, would replace its current greedy economic system with a traditional tribal economic system it would be going (in respect to the economy of our nation) back to Judeo-Christian morality.

Comment
It is not for me to comment on a situation that arose from the occupation of a continent by, first Asian, and then, 9-11 millennia later, by European settlers displacing the earlier (not the original!) occupants. This happened all over the earth’s surface 60-100,000 years ago when the first Homo sapiens left Africa for West Asia (and Europe) and then East and South-East Asia, Australia, the Pacific islands and, of course, the Americas.

Thomas Ivan Dahlheimer writes an interesting essay on the claims by some surviving mid-west ‘native Americans’, anthropologically a misleading label, to their lands in the Dakotas.

My comments are directed at the quoted remarks about Adam Smith, who was not, by the way, ‘the founder of unrestricted capitalism’. Smith died in 1790, long before the word ‘capitalism’ entered the English language in 1854. Nor was commercial society, which Smith wrote about, ‘founded’ by anyone, least of all a moral philosopher.

Societies are not like technical inventions, which are the result of inspired, or maybe accidental, inspiration by individuals; they emerge in their different forms over long periods, sometimes millennia.

Attempts to ‘found’ new societies always (I do not exaggerate) fail, of which Soviet socialism is a prime example on a large scale, while North Korea is another on a smaller scale. I suspect that the re-claimed Wakan Wakpa (Rum River) in Minnesota ancestral homeland would go the same way eventually; experiments of returning people from the modern technological age to past ways of life have not been successful – they tend to break up in acrimony, exhaustion, and desertion. However, that is not my business to comment upon.

Smith did not recommend that people act in their self-interest; he observed that people acted in their self-interest (Smith was an observer, not a missionary). He most certainly did not advocate greed, nor were his observations ‘buttressed with the work of Mandeville, Hume and other avowed atheists’ to pave ‘the way for greed to be viewed as a natural, and even as a positive thing.’

Smith criticised Bernard Mandeville’s (1724) ideas about ‘Private Vice’ being ‘Public Virtue’; in Moral Sentiments (1759) he called such ideas ‘licentious’. David Hume is also totally innocent of the charge of ‘buttressing’ self-interest by notions of greed. What alleged ‘atheism’ has to do with this argument is not stated; it’s simply asserted? It’s almost a slur just to make its author’s case stronger, but for anyone informed of the ideas of Mandeville, Hume, and Adam Smith, the slur damages its author’s case.

Thomas Ivan Dahlheimer, or Wahkon (it’s not clear exactly who is the author) claims that if ‘the dominant society’ would ‘replace its current greedy economic system with a traditional tribal economic system it would be going (in respect to the economy of our nation) back to Judeo-Christian morality.’ Whether that would be a benefit (let alone a possibility) is debateable.

All the well-debated ‘ills’ of Judeo-Christian morality in practice may have dubious credentials for improving any form of society, but the extent that people believe that such morality (in its best forms) would be a benefit to any society is a perfectly legitimate reason for them trying to persuade others the agree with them. However, I think we should approach such suggestions with caution.

Consider this other paragraph from the article:

‘Indigenous people did not follow the English concept of property ownership, but never-the-less they had homelands that they considered their territory, so they did “own” land. And they would defend it if invaders tried to take it away from them. And do so by forcefully driving them from their land, if they had the military might to do so.’

As Shakespeare said, this is the ‘rub’. Wahkon articulates a rather rosy picture of life before the European settlers, perhaps forgetting that the Europeans had formerly been living life-styles similar to the plains inhabitants of mid-west North America. John Locke remarked that ‘in the beginning all the World was America’ (Locke, 1690: Two treatises on Government) and some parts had only recently began to transition from tribalism to commercial society.

The resultant picture in Europe was noisy, bloody, and pretty ghastly. That the tribalism of Wahkon’s past did not embrace private ownership of property does not free it from the consequences of tribal ownership of property, which took several millennia to transit to private property in Europe and East Asia.

The great State tyrannies of Egypt, Babylon, India, and China were founded on State property, and rival conquests, mass slaveries, dominant priesthoods, and dynastic kings and emperors. Something similar (with its attendant horrors) was already well underway in Central and South America when Columbus arrived in 1492 (which does not excuse the barbaric attrocities perpetuated by the Spaniards on the local inhabitants).

Moreover, Wahkon skates over the realities of inter-tribal warfare among the plains and mountain tribes that has began to penetrate anthropologists who have looked beyond the idyllic life before the European settlers and found strong evidence of warfare, raiding, and maltreatment of ‘strangers’ entering tribal property.

I recommend Raymond Kelly’s 2000 book, Warless Societies and the Origin of War, University of Michigan, Ann Arbor, for a detailed, scholarly account, of the realities of life in our mutual tribal past.

Remember, in the beginning, ‘all the World was America’; going back to that past, voluntarily, is not an option. It may come about by a world post-nuclewr, post-biolgical catastrophy.

Adam Smith and Religious Beliefs

Stephen L. Bloom, a Christian lawyer serving clients throughout Pennsylvania, writes in Good News Daily (‘hope after the headlines’)
HERE:

“Good News on the Law: More Laws or More Freedom to Cure the Great O-pression?”

“But to dismiss or underestimate Adam Smith at such a time as this would be a dangerous mistake. Because Smith – although he was a Deist, rather than an orthodox Christian – clearly understood exactly the nature of our menace: The fallen, sinful, self-centered, and hopelessly self-interested human heart; “the imperfect propriety,” as he called it, of our own conduct. And the general economic system Smith articulated in the illumination of that understanding has been the only one ever devised, before or since, to effectively and consistently harness the power of our horrible human greed and transform it for our common good.”

Comment
Adam Smith was not a Christian, ‘orthodox’ or otherwise. I am not sure what Stephen implies by the words: ‘although he was a Deist, rather than an orthodox Christian – clearly understood exactly the nature of our menace’.

Is this a suggestion that only ‘orthodox Christians’ and ‘Deists’ understand the ‘The fallen, sinful, self-centered, and hopelessly self-interested human heart; “the imperfect propriety”?

It is this kind of moral arrogance that gives adherents of religion – any religion – a ridiculous aura. Adam Smith was a moral philosopher and perfectly capable of understanding the culpability of human beings in amoral and immoral behaviours, as did philosophers long before Christianity was known about. They, and he, wrote extensively about the whole range of human behaviours.

As for Deism, proclaiming such matters, especially contrary views to the prevailing orthodoxies of 18th-century society, was not just a matter of exercising an imaginary freedom of speech – an unknown freedom in Scottish society under any of the denominations of Christianity, none of which were any more tolerant than any other when they achieved political power.

The last man (a boy actually, a student) to be hanged for blasphemy, in his case on trumped-up and spurious charges, Thomas Aitkenhead, was hanged in Edinburgh in 1697, and the last witch, a woman more senile than evil, was burned to death in 1727. On an almost weekly basis, somewhere across Scotland, young girls were paraded before the Kirk to be harangued and humiliated by sanctimonious ministers, breathing fire and indignation, for sins of reputation or imputation over sexual activities, not a few of which were caused by members of their incestuous families.

David Hume was accused by Agnes Galbraith of fathering her child out of wedlock in the Chirnside Kirk, 25 June, 1734. She appeared in the sackcloth and was committed to the pillory. (See Mossner, E. C. The Life of David Hume, Oxford, 1980).

Of Course, Hume was widely believed to have been an atheist, a ‘crime’ for which those (very few) who declared to be so, were excluded from ‘polite’ society. He was refused chairs by both Edinbrugh and Glasgow Universities on the interventions of Kirk ministers. Hence, most sensible people took pains never to be suspected of the lack of belief that dare not be named.

Among them was Adam Smith. He had many profound family reasons not to appear as anything other than a Christian (his mother was deeply religious and he would never do anything to upset her). As a professor, he had signed the Calvinist Confession of Faith before the Glasgow presbytery – no signature, no professorship – and he had to open his daily lectures with a prayer, which he tried unsuccessfully to be excused from. He delivered his prayers more in the manner of Natural rather than Revealed religion, for which some still complained (Natural Religion was part of the Moral Philosophy syllabus).

Smith wrote Moral Sentiments with a scattering of Christian sentiments throughout, though they were often qualified by innocuous words and phrases that have passed unnoticed so far (I am documenting these at the moment for my paper to be presented at the Annual Conference of the History of Economics Society in Colorado this June). If he hadn’t done so, his book would likely not have been published; as it was some opinionated divines found grounds upon which to quarrel, some, like Bishop Magee, blamed Smith for his association with the ‘atheist David Hume’. (Hume never admitted to being an atheist)

A further question emerges: to what extent was Smith even a ‘Deist’, or had he abandoned all faith in religion? That remains to be seen – my paper addresses this latter question in the (cautious and tentative) affirmative.

For Stephen, the ‘Christian Lawyer’, who layers his proposals for the current financial problems with a dose of ‘freedom’ may feel obliged to let his case rest solely on his own Christian theology when it becomes clear that Adam Smith’s moral philosophy stands alone without association with any religion.

Given Stephen's ‘misunderstanding’ of Smith’s political economy as manifested in the rest of his article, I doubt whether he will do other than continue to hide under the misapprehensions he has about Smith’s supposed views on religion.