Adam Smiths’ Republican Moment: Lessons for Today’s Emancipatory Thought and Action

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Adam Smith takes a stand that clearly differs from that of the doctrinaire liberalism that would take shape in the first third of the 19th Century. He does not imagine that social life takes place in a neutral, politically aseptic space, free of power relations in which people freely and voluntarily enter into contracts. Indeed, the portrait Smith offers of social life shows a world riven by classes, one that is rigidly compartmentalised into strata and ranks, the distinctions between which have certain identifiable social and historical origins. Adam Smith believes – knows – then, that social life can harbour, that it does harbour asymmetries of power and it is necessary to do away with these if the aim is to preserve the good of society as a whole. In brief, liberty can be called “natural” but in no case is it pre-social or exogenous to social life. It is endogenous to it. Freedom is achieved and politically maintained in the bosom of social life, in the bosom of what could come to be an effectively civil society.

Posted for comments on 17 Dec 2012, 2:47 pm.

Comments (4)

  • I tend to sympathize with the author’s conclusions at page 13-16 (even if point [iii] appears to me simplistic); I find, moreover, rhetorically convincing the link between Hume’s storytelling about the London fire at its beginning and the very last words in the essay; unluckily, to be honest, I still see a few problems in the development of the authors’ argument.

    First of all I will quote a few linguistic eccentricities (although I’m not the most qualified person to correct that, being English my second language), and I won’t be able to correct all of them because the essay, to my judgement, needs simply the kind of re-reading which is usually preliminary to the proper proof-reading activity.

    p. 4 “many life plans that are really ‘[of] our own’”

    p. 6 “…But[,] is such a materially-based idea of personal freedom possible within market societies?”

    p. 7 “demand of[for] public policy”

    Let’s go on with a little and certainly not decisive note:

    p. 10 Note 27. The author makes speculations about what Adam would have thought about the living conditions in late 19th century industrial suburbs, which are in themselves clear; he also adds that these considerations are “needless to say”, which is something I agree with. I would humbly suggest, in fact, to avoid putting oneself in Smith’s mind for this kind of meta-historical comparisons.

    I shall now go on major observations:

    p. 8 “Instead of giving a closed definition of capitalism, as in terms of necessary and sufficient conditions for it to emerge, I will present it as what it really has been: a historically-indexed phenomenon entailing an extension and global connection of productive networks and markets that can be explained as the result of historical processes of material dispossession of the great majority leading to the appearance of a vast disciplined working class.”
    I wouldn’t dare writing so. The reason is that this point is extremely simplistic, so that I think a “closed definition of capitalism”, which the authors says he won’t give, would be in fact highly preferred to this assertive explanation of crucial issues.

    p. 10 “there is need to add to these societal problems that of the massive loss of productivity and efficiency that derives from the fact that the vast majority of people are forced to perform an activity that they do not wish, an activity that therefore turns into ‘forced labor’ – labor that is forced by need, by dispossession. Of course, this does not happen when individuals have the real opportunity to work on what they wish, on what they have dexterities in, on what they have real ‘entrepreneurial spirit’ for. Therefore, capitalism seems to be a system that is both unjust – because its ‘free enterprise’ system constitutes a privilege of the few – and inefficient – because it blocks and buries a huge myriad of forms of productive work individuals and groups would like to do but they cannot access because they are obliged to perform the kind of work that is ‘on offer’ within existing dispossession-based labor markets.”
    Though I make all possible efforts to find a common ground with the author’s extremely radical thought, and to judge it without risking to undermine its most inherently and intimately free development, I must say that in this context the adjective “unjust”, which is utterly adequate when attached to the noun “capitalism”, seems much more easily acceptable than the other one the author uses, that is: “inefficient”. In a sense calling capitalism inefficient might in a way suggest that one is comparing it with other “systems”, or “social arrangements”, or similar things. Certainly one could say the author is suggesting exactly that commercial republicanism is such an alternative arrangement, but he would still need to convince me that such an alternative would be in any way a commercial one, given that the author’s proposal of such an alternative is embedded in an argument that summons a social system which is been virtually freed from the need of labour. Usually, in fact, economies without labour [like the famous Sraffa’s text (1960)] are not particularly commercial, though generally speaking it is possibly arguable that they could be, if one had more arguments for this case. I’m not saying the author is wrong, but rather that this point is extremely weak.

    p. 12 “According to Smith, there is need, first, to find ways to politically expel from economic life – through firewalls – those whose only motivation to produce has to do with obtaining big amounts of wealth and economic power through the introduction of forms of market power and economic privilege”
    I wouldn’t say Smith would “expel” anybody and moreover, above all, Smith states clearly that private vices are in themselves public virtues (not really in Mandeville’s terminology, but rather in a passage that I don’t have here and that is so universally known that would be certainly not difficult to find), which seems to be the opposite of what the author says.

    p. 12 “In effect, rents are the result of unproductive labor”
    Aren’t they the result – say – of comparative advantages? Showing that the author’s proposition holds would be certainly a major result in economic theory.

    Anyway I think there is already certainly much work behind this essay, that I found also interesting, though also peculiarly – and I think not convincingly enough – structured in its central part, namely the third paragraph. Anyway, to my judgement, it might just need only a few reconsiderations in its core part and a linguistic check throughout the text, mainly because the main point doesn’t seem to be the one of introducing a convincing interpretation of any of Smith’s ideas, but rather the possible connections between Smith’s texts and actual debates.
    I can just add that the author could have found probably many other arguments for Smith’s republicanism in his majestic Theory of moral sentiments, at least since republicanism is normally linked with a conception of ethics based on virtues. At the same time, from a personal point of view, I’m glad he didn’t, as that would have been again, probably, a fairly biassed interpretation based on a selection of passages, and therefore a reading of Smith as if he were Rousseau.

  • David Casassas says:

    I really appreciate the reviewer’s insightful comments, which are really helpful to me in many aspects. I would like here to react to some of his remarks, so that I can clarify some of my own points. I shall go step by step.

    1. As for the “linguistic eccentricities” he finds (in my case, English is the fourth language), this draft still needs re-reading and polishing indeed. I had planed to do this linguistic work while I make the final changes, always with the hope that the first version I sent to “Economic Thought” was understandable enough for the editors and reviewers to assess it and comment on it. In any case, I appreciate the fact that the reviewer has already signalled some of those linguistic inaccuracies. I will deal with them in due course.

    2. It is very true that one should not make speculations about what an author would have thought about a future period’s living conditions. Therefore, some alternative wording must be used in note 27, where I only try to make clear that the kind of problems Adam Smith seems to find in 18th Century productive units were still present (and had worsened) in 19th and 20th Century ones.

    3. I move on now to the definition of capitalism. I think it does not make sense to give a closed definition of capitalism, as it is not a phenomenon that unfolds homogeneously, but takes different forms across societies. Besides, neither private property, nor markets, nor the use of money, nor the search for profits, etc., are phenomena that appear with capitalism, but they have been present in almost all societies since the Bronze Age. What I wanted to underline here is that what makes capitalism a very special social formation – or, in other words, what constitutes a real “novelty” – is the fact that it is deeply rooted in huge long-reaching processes of dispossession of the vast majority of the population, which leads to the appearance of an enormous disciplined (by need) working class. I think both classics like Smith and Marx and contemporary economic historians like Robert Brenner and Ellen Meiksins Wood, among many others, help us understand this point very well. And I think it is worth emphasizing it here because of its social and economic implications, which are the object of further analysis in the following sections of the paper.

    4. The comments the reviewer makes on the comparison between capitalism and possible alternatives to it that are both more just and more efficient are extremely relevant. Certainly, I am thinking here of “social arrangements” that are built on an undominated basis (thanks to the introduction of public policy measures that free individuals from being forced to sell their labour force into labour markets, which does not mean that they will necessarily decide to do so) and that permit the emergence of many forms of free association between equals within the productive sphere: cooperatives, self-management productive projects, etc. Authors like Elinor Ostrom, Sam Bowles, Herbert Gintis, Arjun Jayadev, Yanis Varoufakis, Michael Krätke, and Erik Olin Wright, among many others, have shown us that a freedom-respecting productive and commercial world can be constituted when individuals count on certain opportunities sets enabling them to oppose to wage-earning work and thus to open up the doors to more democratic ways to organize investment, production, distribution, consumption, etc. Besides – some of those authors add – those productive arrangements tend to lead to higher levels of efficiency and productivity, for they are based on tasks and activities that are more tightly linked to our real projects, wishes and dexterities.

    In short, not being forced to perform heteronomously shaped forms of wage-earning labour – within actual labour markets – can nourish the sort of “entrepreneurial spirit” authors like Adam Smith claimed everyone had to have access to. Today, having this power to say “no” to freedom- and democracy-limiting economic arrangements and to say “yes” (and put into motion) democratic (re)productive institutions demands the presence of universal and unconditional public policies guaranteeing individuals relevant degrees of socioeconomic independence as a right – which is the object of detailed analysis in pages 15-17.

    Finally, as it can be seen, those “alternative arrangements” are fully compatible with having a commercial world. In effect, not being forced to perform wage-earning work does not mean that you won’t perform wage-earning work, and, more importantly, it does not mean that, in case you don’t perform wage-earning work, you won’t produce goods and services that you can lead to markets. In other words, commercial republicanism offers us an intellectual and political perspective for us to erect a world where the decisions on what to (de)commodify is open to democratic discussion between all parties.

    In any case, seeing what the reviewer comments on my passage in page 10, I think it is worth introducing a short paragraph making clear what my point is with regard to the concretisation of “commercial republicanism” as an alternative to capitalism (or, in other words, as an socioeconomic order that was and has been historically blocked by the deployment of really existing capitalism).

    5. The reviewer says: “I wouldn’t say Smith would “expel” anybody [from markets] and moreover, above all, Smith states clearly that private vices are in themselves public virtues (not really in Mandeville’s terminology, but rather in a passage that I don’t have here and that is so universally known that would be certainly not difficult to find), which seems to be the opposite of what the author says.”

    This is clearly the kind of misinterpretation of the work of Adam Smith I am trying to avoid. In spite of his general trust in markets, Adam Smith very clearly states that some practices led by the most powerful economic actors undermine the kind of freedom one must expect from market societies. Therefore, political institutions must take all kind of precautions and intervene into economic life when such powerful actors find ways to create market power positions, which must be destroyed by all means. This can be easily seen in the paragraph from the Wealth of Nations I quote in page 12. It is only when these freedom-limiting practices have been expelled from social life – from markets – that markets (may) act as proper coordinating social institutions and society reaches high levels of freedom, prosperity and well-being.

    Having said that, one should add – as the reviewer does – that, as it is known, Adam Smith includes self-interest into his (faithful) description of human action: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest”, Smith says. But one should not forget that, at the same time, Smith defends – against Mandeville, which he openly and harshly criticises in the “Theory of Moral Sentiments” – that human motivational apparatus is plural, and includes important altruist and cooperative inclinations that have to do with our deep wish to live in a civilized inclusive society. This is why it makes sense to condemn and aim at politically expelling from markets those economic practices/actors that imperil the existence of such a civilized inclusive society.

    6. In page 12, I say that “rents are the result of unproductive labor”. The reviewer says: “Aren’t they the result – say – of comparative advantages?” I think there is need to clarify terms here. In the context of what is under discussion in page 12, “rents” are those incomes you get in an unproductive way, normally because you enjoy certain degrees of market power. It is in this sense in which Keynes says (in chapter 24 of his “General Theory”) that there is need to carry out the “euthanasia of the rentier”. Of course, a part of (productive) income is the result of comparative advantages; but what I wish to underline here is that another important portion of the income certain actors have originates in the kind of unproductive labour that is linked to entry barriers and other forms of market power (within the fields of land/housing, industry, finance, etc.).

    7. Finally, I strongly agree with the reviewer’s prudence with regard to the danger of a possible Rousseaunian romanticised reading of Adam Smith. It is true that the “Theory of the Moral Sentiments” is a crucial text in order to understand Adam Smith’s project. In fact, Smith’s claim that individuals wish to enjoy undominated social relations within non-fractured social formations traverses the whole paper, and I must possibly make its connection to the “Theory of Moral Sentiments” more explicit. However, in this paper I am primarily interested in showing what the political side of Adam Smith’s project was, that is: the public making of social institutions – especially markets – capable of harbouring freedom- and cohesion-respecting social relations. The “Wealth of Nations” offers extremely valuable insight in this respect.

    I do hope these reflections will help clarify some of my points. I can only thank the reviewer for his valuable contribution, and the editors for letting me elaborate on it.

  • Andy Denis says:

    Comments on “Adam Smiths’ Republican Moment: Lessons for Today’s Emancipatory Thought and Action” by David Casassas

    Comment by Andy Denis, City University London, 28 May 2013.

    The first two words of the title of this article are Adam and Smith; yet this is not an article on Adam Smith. There are a number of references to Adam Smith – Smith on the need to control the issue of paper currency, the relative difficulties of master and workmen in surviving a strike, the destructive effects on the worker of routine labour, and the interest of the capitalist in acting contrary to the public interest. But the bulk of the paper, in so far as it refers to Smith at all, simply makes assertions without argument or documentary evidence. The verdict on the piece therefore has to be that it is not ready for publication. The author should be asked to re-write, supplying the evidence missing in this draft. Whether there is a case which can be made will only be known once the author has made the attempt to make it.

    The rest of this comment identifies some points where the author neglects to support his claims.
    The claim that in Smith liberty is capable of being concentrated in a few hands (p 2) is not supported by any evidence. On the contrary, the passage cited merely allows that anyone can exercise liberty and that when some do it is capable of endangering the society: in such cases it must be controlled – but there is no suggestion of any concentration, which rather would be the negation of liberty for the majority.

    At the bottom of p 2 Smith is said to want to do away with asymmetries of power – evidence? Liberty is endogenous to society – evidence?

    “Adam Smith is part of an ethical-political tradition the project of which was – and still is – that of constructing party walls and firewalls – in other words, that of opening up the doors to relevant doses of State intervention”. No evidence. This sounds like an exaggeration. Viner has documented the numerous “exceptions” to the simple system of natural liberty in Smith – the author seems to want to turn it round and make the project one of fire-walls, and the simple system of natural liberty the exception.

    “I shall present Adam Smith’s ethical-political analysis, which was very influential in the shaping of classical political economy, as part of the broad republican tradition.” But all we get is the assumption, the claim without argument or evidence, that Smith is allied to this “broad republicanism”. Largely the paper it seems is an exposition of the author’s views – going far beyond Smith – as to the virtues of “commercial republicanism” as an “emancipator project”.
    Section 1 starts “as it [sic] is well known” – but the claim that follows is not well-known. It is the claim that the republican tradition revolves around a specific set of ideas related to firewalls. But surely it would not be unreasonable to say that, while this set of ideas might be more or less important in various republican trends, the idea that republicanism revolves around is that there should be a republic, and not a monarchy.

    The author claims that a “rigorous historical approach” allows us to see certain things, but does not refer us to any such rigorous historical approach to justify the claim. He says that the idea of property is always central to republicanism – plausible, but why not show us this, rather than just asserting it? He immediately redefines “property” to mean “socioeconomic or material independence” – again without any evidence that contemporary republicans, let alone Smith, would accept this definition of property.

    He says that this standpoint on the material conditions of freedom is closely linked to an ontology, namely one of social division into classes and their struggle for their own interests. Here we are presented with evidence of this view in Smith (though no argument is made for its asserted connection with the notion of property as material independence), but not of this view in the ‘republican tradition’.

    The author immediately dives off into series of statements, about “respect[ing] everyone’s autonomous decisions regarding everyone’s life plans”, which seem to have little to do with Smith.
    We hear little of Smith here. “It will suffice to say at this point, to sum up, that Adam Smith’s project of a commercial republicanism, like that of other members of the Scottish Enlightenment and that of the bulk of the political economy of Enlightenment (Hudson, 2009), had to do with the ideal of the “free producer”, a producer that is free either because he is the proprietor of the means of production or because he enjoys effective control over his productive activity and workplace, over the social and economic space where he operates”. No it will not suffice. The case has to be made. It has to be made by examining the text of Smith’s works – no argument is made, no evidence adduced: all we have is assertion piled upon assertion.

    According to Casassas, “such a free producer emerges only once political institutions have erected those firewalls that are required to avoid and remove social and economic privileges and to extend economic participation and inclusiveness.” When re-writing, the author should explain how this engages with Smith’s concern to protect property against those who have none: “Till there be property there can be no government, the very end of which is to secure wealth, and to defend the rich from the poor.” (Smith Lectures on Jurisprudence, cited in WN V.i.b.12 n21) “The acquisition of valuable and extensive property, therefore, necessarily requires the establishment of civil government.” (WN: V.i.b.2) “Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.” (WN V.i.b.12)

    In section 2 Casassas asks “is such a materially-based idea of personal freedom possible within market societies? The answer Adam Smith offers us is cautious yet positive.” But Smith’s answer to this question – even Smith’s consciousness that such a question is askable – is not documented.

    “Adam Smith himself helps us understand [that] “market”, in singular or abstract terms, does not exist; what do exist are different forms of markets that have been historically configured as a result of a political option”. No instance of Smith himself helping us in this way is adduced.

    “Adam Smith understood the running of markets in this way. In effect, according to Smith, markets are not metaphysical entities, but human creations that emanate from a specific political-institutional option” – again, no evidence whatsoever.

    “Hence Adam Smith’s justification of State intervention. Adam Smith’s demand of public policy such as infrastructures, educational programs or taxation schemes and of any other measure or set of measures a society might want to implement is always aimed at dissolving asymmetries of power and bonds of dependence, both those coming from old times – feudal, guild-related and mercantile hierarchies, authorities, exclusions and privileges … and those characteristic of modern times: new privileged power positions of certain proprietors or employers within new markets.” No evidence, just assertion.

    “modern societies – Smith said – should be able to make good use of the advantages of decentralized exchanges of goods and services of many sorts, for decentralized exchanges permit living a productive live in an autonomous non-dominated way, that is, without having to ask arbitrary authorities the permission to do every little thing you might want to do in the field of giving and receiving reciprocally.” We should remain sceptical until Casassas can show us exactly where Smith said this.

    “What Adam Smith tells us is that … political institutions [should] radically intervene to dissolve those bonds of dependence and power relations that are deeply rooted on class privileges, on class relations.” Where does he tell us this?

  • David Casassas says:

    Comment from David Casassas in reply to Andy Denis

    I am very thankful for Andy Denis’ comments, which help me realize that some more textual evidence from Adam Smith’s works is needed. The reason why I did not add more original quotes is twofold. First, there is a space limit – although this can be solved by giving references without having to introduce whole paragraphs. Second, this paper aims at offering an interpretive framework to understand the sense and orientation of Adam Smith’s work – and its validity for today’s thought –, which forces me to make statements on historical context, intellectual and political tradition, methodology, etc., that sometimes cannot be accompanied by a particular concrete quote. This is very clear, for instance – and I could put some other examples –, when I explain that Smith – unlike neoclassical economists – thinks that markets are not abstract entities, but human constructions that have been built according to particular political options. It is very difficult to offer a textual quote where Smith states this, for the very reason that such a textual quote does not exist; however, it must be said that, if one carefully reads the text and interprets it in its particular historical/intellectual/political context, one immediately realizes that this is one of the main points Smith makes all along his works. In sum, what this paper aims at doing is to reconstruct an intellectual scenario and insert Smith in a particular tradition – that is, republicanism –, and draw some conclusions from Smith’s analysis that can be of our interest today as well. Therefore, there are some elements in my analysis that are not explicitly cited by Smith himself, be it because a) they have to do with my overall approach to the republican tradition as a whole; or b) because what these elements aim at showing is a link between Smith and republicanism that is always latent but not always explicit – partly because, in spite of what liberal hermeneutics assumes, in Smith’s times such republican roots were taken for granted. Having said all this, I go back to my first point: although this paper does not aim at doing a 1:1 scale analysis of Smith’s works, the reviewer has clearly shown that more quotes and references are needed – and I can only thank him for that. I will be pleased to add them in due course.