Barbaric Heart: Faith, Money, and the Crisis of Nature by Curtis White

Author:Curtis White [White, Curtis]
Language: eng
Format: epub
Tags: Science
ISBN: 9780981709123
Google: H9G5wAEACAAJ
Goodreads: 6709770
Publisher: Routledge
Published: 2009-01-15T06:33:33+00:00

Seven

On the Uses and Abuses of Adam Smith

Division of labor! Fall in!

NIETZSCHE

IT IS NOT ONLY Christ's disdain of hypocrites that the Chicago School's cult of economic reason runs afoul of. It is also curiously at odds with its own putative bible, Adam Smith's The Wealth of Nations.

The Wealth of Nations is the first strategic effort not only to acknowledge the essence of the capitalist ethos (unfettered pursuit of self-interest and profit) but to propose a complex interdependence of workers, property owners, and the state to control and limit the destruction that was otherwise completely natural to what would come to be called capitalism. Smith’s work is not a how-to or a moral justification of capitalism; it is a plan for mitigating the inevitable destructive effects on the people most vulnerable to it. His moral philosophy is pragmatic. It takes what he openly describes as a far from ideal situation and tries to find ways to limit the damage.

We do Adam Smith a profound injustice when we cite him unambiguously as the father of the awful notion of the economics of self-interest.27 Like Marx, Smith is often cited but not much read, or not carefully read, by commentators on our economy. In fact, Smith’s The Wealth of Nations is in many ways a profound and pessimistic critique of capitalism. How this is so requires much more explanation than I have room for here, but let the following comments at least indicate the need for such an explanation.

To begin with, Smith’s exposition begins as a critique of the reigning economic theory of the moment, “mercantilism.” Mercantilism, devised in the interest of the great seventeenth-century monarchies by bureaucrats like Jean-Baptiste Colbert in the court of Louis XIV, argued that the state should manage the economy by using licenses, setting prices, and establishing tariffs to protect domestic production. What Smith objected to in mercantilism was not the interference of the state in economics but the interference of the state in order to create laws to benefit the already rich and powerful at the expense of the poor, especially in the form of state-policed monopolies.

The French historian Fernand Braudel describes the violent world of mercantilism in his magnificent work The Wheels of Commerce.

The dominant factor of textile organization in Leyden was undoubtedly the implacable force of the means of coercion employed: surveillance, repression, imprisonment and even execution were a constant menace. The regents of the town unrelentingly supported the privileged class. And the manufacturers were united in a kind of cartel covering the whole of Holland and even the whole of the United Provinces. They met every two years in a general “synod” to eliminate any damaging competition, to fix prices and wages, and on occasion to decide what action was to be taken against worker’s protests whether actual or potential. (Wheels, 501)

This was the economic reality in Europe one hundred years before the industrial revolution.

What Smith suggested was that it would be preferable to allow the “natural” inclination of humans functioning in their self-interest to govern the economy.

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