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DAVID HART'S WEBPAGE

Putting the “Political” back into Adam Smith’s Political Economy: Smith on Power and Privilege, Faction and Fanaticism, and Corruption and Conspiracies

By David M. Hart

[Created: 18 September, 2023]
[Revised: 13 December, 2023 ]

A paper given at the History of Economic Thought Society of Australia conference (20 Sept. 2023) held at the University of Canberra.

I have produced my own "near replica" editions of Adam Smith's major works which I have used in this paper. They are part of "The Guillaumin Collection."

See also the "concept map" I created: "Vocabulary Clusters in the Thought of Adam Smith: Smith’s Theory of Ranks, Class, and Government" (26 September, 2023).

Adam Smith, The Theory of Moral Sentiments; Or, An Essay towards an Analysis of the Principles by which Men naturally judge concerning the Conduct and Character, first of their Neighbours, and afterwards of themselves. To which is added, a Dissertation on the Origin of Languages. By Adam Smith, LL. D. Fellow of The Royal Societies of London and Edinburgh; One of the Commissioners of His Majesty's Customs in Scotland; And formerly Professor of Moral Philosophy in the University Of Glasgow. Printed for A. Strahan; and T. Cadell in The Strand; and W. Creech, and J. Bell and Co. at Edinburgh. MDCCXC. (1790). Available in facs. PDF (vol. 1 and vol. 2), enhanced HTML, and ePub formats.
Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. Formerly Professor of Moral Philosophy in the University of Glasgow. In Two Volumes.(London: Printed for W. Strahan; and T. Cadell, in The Strand, MDCCLXXVI (1776)). Available in facs. PDF (vol. 1 and vol. 2), enhanced HTML, and ePub formats.

Contents

 

 

I. Introduction↩

Discovering the new Adam Smith as a theorist of political power and class

Scholarship on Adam Smith has revealed several sides to his body of thought. There is

  1. Adam Smith the economist - WN
  2. Adam Smith the moral theorist (sympathy, benevolence) - TMS
  3. Adam Smith the legal theorist (jurisprudence) and economic/historical sociologist (4 stage theory, the mercantilist system) - LJ

Recently there has been a flurry of interest in yet another aspect of AS’s thought, that of AS the political theorist and political sociologist, in the work of Lisa Hill and Paul Sagar in particular. [1] I came across the “new AS” while working on a larger project on the history of “Classical Liberal Class Analysis” (henceforth CLCA) from the 16thC to the present, a summary of which appeared as a chapter on “Class” in The Routledge Companion to Libertarianism (2022). [2] As part of this project I examined a group of contemporaneous thinkers in the Scottish and French Enlightenment (Adam Smith (1723-1790), Adam Ferguson (1723-1797), Jacques Turgot (1727-1781) and John Millar (1735-1801)), and their ideas on “rank” and “station”, as well as their ideas on “productive” and “unproductive labour”. I realized that as I read TMS more closely there was a theory of politics, political power, and class which was running alongside his moral philosophy which has been neglected by scholars until very recently. Paul Sagar has observed correctly that TMS “contained some of Smith’s most penetrating, albeit frequently submerged, political insights.”[3] After my own closer reading, I came to the same conclusions that Hill and Sagar had, that it was time to put the “political” back into Smith’s political economy. This paper is an attempt to do just that.

A Summary of Classical Liberal Class Analysis

Because I believe AS is very much within the tradition of CLCA I should briefly summarize what I mean by this. It is my contention that classical liberals and their proto-liberal forebears (like AS) developed their own theory of class and class exploitation well before the better known version developed by Karl Marx appeared in the 1840s. [4]

Central to CLCA is the idea that a small non-productive and exploiting class with access to the coercive powers of the state used that power to exploit a much larger productive class of workers and tax-payers. This “legally privileged or exploiting class” pursued their own interests at the expense of an “unprivileged or exploited class” by taking the latter’s justly acquired property through taxation, by preventing them from undertaking the business or occupation of their choice (prohibitions and regulations), by preventing them from buying the cheapest goods and services from foreign or more competitive domestic suppliers (trade “protection”), and by forcing them to buy more expensive goods and services from state-favored and privileged suppliers (subsidies, state contracts).

The thinkers I mentioned above (Adam Smith, Adam Ferguson, Jacques Turgot, and John Millar) had a number of shared interests in the nature of productive and “unproductive” labour and who engaged in it, the notion of “rank” within societies, the corrupting influence of political power, the problem of “faction” and “system”, and a four-stage theory of history through which societies moved as their ruling elites and the means by which wealth was created and appropriated evolved over time.[5]

Adam Smith on class

Smith’s thinking about class was largely implicit in that he accepted the general Enlightened idea that history evolved through various economic stages (namely, the stages of hunting, pasturing, agriculture, and commerce) which he expressed in his Lectures on Jurisprudence (1762, 1766),[6] that societies were structured according to one’s rank and order each of which had their own “powers, privileges, and immunities”, which he discussed in Theory of Moral Sentiments (1759, 1790),[7] and that a complex “system of government” had emerged under mercantilism which granted legal and economic privileges to some manufacturers and agricultural producers at the expence of other consumers and producers, in The Wealth of Nations (1776).[8] Yet he did not develop any detailed or coherent discussion of either the historical evolution of classes or the nature of the class structure of his own day. The basic ideas were there and he referred to them in passing on many occasions but the pieces would not be put together in a more explicit way until later when several of his followers in the English and French classical liberal school of thought would do just that (such as Charles Comte, Charles Dunoyer, Frédéric Bastiat, Gustave de Molinari, and Herbert Spencer). Perhaps this is something AS planned to do in his never published work on law and government, the notes and papers for which were burned on his instructions prior to his death.

In this paper I want to make explicit what is implicit in AS’s thinking and to attempt to mold it into a more coherent whole.

The Plan of the Paper

Before I turn to a discussion of AS’s theory of the state and class (what I call “The Reality”) I will briefly discuss his conception of “The Ideal”, i.e. what kind of society and state AS thought would protect peoples’ natural rights and ensure limited government and the operation of the free market, and how he thought a “prudent man” and a “just man” should behave in such as society.

In the section on “The Reality” I will briefly discuss AS’s theory of human behaviour before turning to a more detailed discussion of the topics summarised in the title of this paper: “Power and Privilege, Faction and Fanaticism, and Corruption and Conspiracies”. Some specific examples discussed by AS himself concerning how power and privilege actually operated in the present and recent past - slavery and the mercantile system - will also be discussed.

I will conclude with a discussion of how AS thought society could or could not be reformed so that a properly functioning “system of natural liberty” might gradually emerge and do away with or at least minimise the threats to liberty posed by “Power and Privilege, Faction and Fanaticism, and Corruption and Conspiracies.”

 

 

II. Some Opening Quotes to set the Scene↩

The Powers, Privileges, and Immunities of the High Ranks and Orders in Society

[TMS II-101-02 online]: Every independent state is divided into many different orders and societies, each of which has its own particular powers, privileges, and immunities. Every individual is naturally more attached to his own particular order or society, than to any other. His own interest, his own vanity, the interest and vanity of many of his friends and companions, are commonly a good deal connected with it. He is ambitious to extend its privileges and immunities. He is zealous to defend them against the encroachments of every other order or society.

Upon the manner in which any state is divided into the different orders and societies which compose it, and upon the particular distribution which has been made of their respective powers, privileges, and immunities, depends, what is called, the constitution of that particular state.

Upon the ability of each particular order or society to maintain its own powers, privileges, and immunities, against the encroachments of every other, depends the stability of that particular constitution. That particular constitution is necessarily more or less altered, whenever any of its subordinate parts is either raised above or depressed below whatever had been its former rank and condition.

On Deference to Rank and Authority

[TMS I-228 online] : Even when the order of society seems to require that we should oppose them (men of high rank and authority] , we can hardly bring ourselves to do it. That kings are the servants of the people, to be obeyed, resisted, deposed, or punished, as the public conveniency may require, is the doctrine of reason and philosophy; but it is not the doctrine of Nature. Nature would teach us to submit to them for their own sake, to tremble and bow down before their exalted station, to regard their smile as a reward sufficient to compensate any services, and to dread their displeasure, though no other evil were to follow from it, as the severest of all mortifications. To treat them in any respect as men, to reason and dispute with them upon ordinary occasions, requires such resolution, that there are few men whose magnanimity can support them in it, unless they are likewise assisted by familiarity and acquaintance.

 

 

III. Smith’s Ideal of the Just and Free Society↩

Here I will briefly discuss AS’s conception of “The Ideal”, i.e. what kind of society and state he thought would protect peoples’ natural rights and ensure limited government and the operation of the free market (in other words his “system of natural liberty”), and how he thought a “prudent man” or a “just man" should behave in such a society.

It is necessary to do this in order to get into perspective the objections AS had to the class system based upon high rank, the "powers, privileges, and immunities" these ranks and orders had, and the other groups like protected merchants and manufacturers, large landowners, and slave owners who also enjoyed benefits and privileges under the coercive umbrella provided by the state. In short, AS objected to this system of power and privilege because it violated the natural rights of the majority of the people (I can't say "citizens" because slaves obviously were not granted the status of "citizen" because of the fact that they were the property of individuals who were citizens).

Adam Smith’s Theory of Natural Rights and the System of Natural Liberty

First of all AS believed people enjoyed a number of "those rights that belong to a man as a man” [LJ (A), i. 24: 13 and LJ (A), 12-13: 8] which he also called "naturall rights". He quotes Pufendorf on this, who listed the following natural rights” [LJ (A), 12-13: 8]:

"jus ad vitam, ad corpus, liberi commercii, jus connubiorum"

These can be translated as

the right to life, the right to one’s own body, the right to engage in free trade (or as he put it “a right of trafficking with those who are willing to deal with him”), and the right to live with the person of one's choice (in this case “marriage”).

A person has “a right to have his body free from injury, and his liberty free from infringement unless there be a proper cause” [LJ(B), 11: 401].

The person also has a right to own and keep property, the “most sacred and inviolable” of which is “the property which every man has in his own labour” and which is “the original foundation of all other property”. Thus there is no just reason to prevent a worker and an employer from entering any mutually agreed upon working arrangement involving both parties.

[WN I-151 online]: THE property which every man has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of a poor man lies in the strength and dexterity of his hands; and to hinder him from employing this strength and dexterity in what manner he thinks proper without injury to his neighbour, is a plain violation of this most sacred property. It is a manifest encroachment upon the just liberty both of the workman, and of those who might be disposed to employ him. As it hinders the one from working at what he thinks proper, so it hinders the other from employing whom they think proper. To judge whether he is fit to be employed, may surely be trusted to the discretion of the employers whose interest it so much concerns. The affected anxiety of the law-giver lest they should employ an improper person, is evidently as impertinent as it is oppressive.

From whence flows the right “to enjoy the fruits of (one’s) own labour” and “the natural effort of every individual to better his own condition” upon which depends the wealth and prosperity of society:

[WN II127-28 online]: THAT system of laws, therefore, which is connected with the establishment of the bounty, seems to deserve no part of the praise which has been bestowed upon it. The improvement and prosperity of Great Britain, which has been so often ascribed to those laws, may very easily be accounted for by other causes. That security which the laws in Great Britain give to every man that he shall enjoy the fruits of his own labour, is alone sufficient to make any country flourish, notwithstanding these and twenty other absurd regulations of commerce; and this security was perfected by the revolution, much about the same time that the bounty was established. The natural effort of every individual [II-128] to better his own condition, when suffered to exert itself with freedom and security, is so powerful a principle that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often incumbers its operations; though the effect of these obstructions is always more or less either to encroach upon its freedom, or to diminish its security. In Great Britain industry is perfectly secure; and though it is far from being perfectly free, it is as free or freer than in any other part of Europe.

Once these rights to person, property, working, and exchange were secured AS believed a “system of natural liberty” would emerge “of its own accord” (or “spontaneously” as Hayek would argue). [9]

[II-289 online]: ALL systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man or order of men.

Adam Smith on Limited Government

The greatest impediments to the enjoyment of these rights came from two main sources according to AS. Firstly, the ability and willingness of the “executive power” (monarchs and statesmen) to tamper with the “judicial power” to violate the rights of some persons for the benefit of themselves or other favored groups. An secondly, the combination of the “ambition” of the executive power and the “rapacity” of the merchants and manufacturers which had taken place at the time of his writing.

Concerning the former:

[WN II-329 online] : WHEN the judicial is united to the executive power, it is scarce possible that justice should not frequently be sacrificed to, what is vulgarly called, politics. The persons entrusted with the great interests of the state may, even without any corrupt views, sometimes imagine it necessary to sacrifice to those interests the rights of a private man. But upon the impartial administration of justice depends the liberty of every individual, the sense which he has of his own security. In order to make every individual feel himself perfectly secure in the possession of every right which belongs to him, it is not only necessary that the judicial should be separated from the executive power, but that it should be rendered as much as possible independent of that power. The judge should not be liable to be removed from his office according to the caprice of that power. The regular payment of his salary should not depend upon the goodwill, or even upon the good oeconomy of that power.

The second great impediment to the enjoyment of the natural rights of the people came from “the capricious ambition of kings and ministers” and “the mean rapacity, the monopolizing spirit of merchants and manufacturers”. AS concluded that “the violence and injustice of the rulers of mankind is an ancient evil for which, I am afraid the nature of human affairs can scarce admit of a remedy .” But is was certain that they (the merchants and manufacturers) “neither are, nor ought to be the rulers of mankind”:

[ WN, IV. iii. c. 9; II-82-83 online]: BY such maxims as these, however, nations have been taught that their interest consisted in beggaring all their neighbours. Each nation has been made to look with an invidious eye upon the prosperity of all the nations with which it trades, and to consider their gain as its own loss. Commerce, which ought naturally to be, among nations, as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity. The capricious ambition of kings and ministers has not, during the present and the preceeding century, been more fatal to the repose of Europe than the impertinent jealousy of merchants and manufacturers. The violence and injustice of the rulers of mankind is an ancient evil, for which, I am afraid the nature of human affairs can scarce admit of a remedy. But the mean rapacity, the monopolizing spirit of merchants and manufacturers, [II-83] who neither are, nor ought to be the rulers of mankind, though it cannot perhaps be corrected, may very easily be prevented from disturbing the tranquillity of any body but themselves.

What these “rulers of mankind” should be doing in AS’s opinion is very little. His idea of a limited government was that the “sovereign” should give up any attempt to “superintend the industry of private people” or to plan and “direct” the entire economy in “the interest of society”, partly because of the knowledge problem identified by Hayek ( “no human wisdom or knowledge could ever be sufficient”), and partly because it would violate the principles of “the system of natural liberty”. Instead he should limit his activity too three things:

  1. protecting the society from the violence and invasion of other independent societies
  2. protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice
  3. erecting and maintaining certain publick works and certain publick institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain

The paragraph cited above continues as follows:

[WN II-289 online]: The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of super-intending the industry of private people, and of directing it towards the employments most suitable to the interest of the society. According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings: first, the duty of protecting the society from the violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, thirdly, the duty of erecting and maintaining certain publick works and certain publick institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expence to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.

If these conditions are met, we now have a “system of natural liberty.”

The discussion which follows in this paper shows what AS thought about how and by whom this “natural system of liberty” was disrupted, and what could be done to rectify the situation.

The Behavior of the “just and prudent man” in the “Natural System of Liberty”

Like a novel, TMS is filled with interesting characters whose thoughts, motivation, and behaviour are discussed at length by AS. The cast of characters include good men, bad men, men of no particular moral character, various “observers” of the human drama, and a collection of “conductors”, ‘directors”, administrators”, “beings”, “generals”.[10]

It is clear that in order for the “system of natural liberty” to function properly there needs to as large a number of virtuous, prudent, and just men as possible, and as few as possible of party men, politically ambitious men, vain men, and men of system. I have selected here a couple of quotes which illustrate how some of these good men should behave in AS’s view.

Since natural justice is so important, here is how AS thought “the just man” should behave in a world full of injustice. The first concerns the just man’s “resentment for injustice attempted, or actually committed”:

[TMS II-66-67 online]: Proper resentment for injustice attempted, or actually committed, is the only motive which, in the eyes of the impartial spectator, can justify our hurting or disturbing in any respect the happiness of our neighbour. To do so from any other motive is itself a violation of the laws of justice, which force ought to be employed either to restrain or to punish. The wisdom [II-67] of every state or commonwealth endeavours, as well as it can, to employ the force of the society to restrain those who are subject to its authority, from hurting or disturbing the happiness of one another. The rules which it establishes for this purpose, constitute the civil and criminal law of each particular state or country. The principles upon which those rules either are, or ought to be founded, are the subject of a particular science, of all sciences by far the most important, but hitherto, perhaps, the least cultivated, that of natural jurisprudence; concerning which it belongs not to our present subject to enter into any detail. A sacred and religious regard not to hurt or disturb in any respect the happiness of our neighbour, even in those cases where no law can properly protect him, constitutes the character of the perfectly innocent and just man; a character which, when carried to a certain delicacy of attention, is always highly respectable and even venerable for its own sake, and can scarce ever fail to be accompanied with many other virtues, with great [II-68] feeling for other people, with humanity and great benevolence. It is a character sufficiently understood, and requires no further explanation. In the present section I shall only endeavour to explain the foundation of that order which nature seems to have traced out for the distribution of our good offices, or for the direction and employment of our very limited powers of beneficence: first, towards individuals ; and secondly, towards societies.

This “resentment for injustice attempted, or actually committed” will be needed in AS’s view in the face of the existance of slavery and the mercantile system which will be discussed below.

The second concerns the just man in time of war who needs to maintain his support for justice and follow the advice of the impartial spectator in his breast, even if it means suffering the approbation of his fellow citizens:

[TMS I-382-84 online] : The propriety of our moral sentiments is never so apt to be corrupted, as when the indulgent and partial spectator is at hand, while the indifferent and impartial one is at a great distance.

Of the conduct of one independent nation towards another, neutral nations are the only indifferent and impartial spectators. But they are placed at so great a distance that they are almost quite out of sight. When two nations are at variance, the citizen of each pays little regard to the sentiments which foreign nations may entertain concerning his conduct. His whole ambition is to obtain the approbation of his own fellow-citizens; and as they are all animated by the same hostile passions which animate himself, he can never please them so much as by enraging and offending their enemies. The partial spectator is at hand : the impartial one at a great distance. In war and negotiation, therefore, the laws of justice are very seldom observed. Truth and fair dealing are almost totally disregarded. Treaties are [I-383] violated ; and the violation, if some advantage is gained by it, sheds scarce any dishonour upon the violator. The ambassador who dupes the minister of a foreign nation, is admired and applauded. The just man who disdains either to take or to give any advantage, but who would think it less dishonourable to give than to take one; the man who, in all private transactions, would be the most beloved and the most esteemed; in those public transactions is regarded as a fool and an idiot, who does not understand his business; and he incurs always the contempt, and sometimes even the detestation of his fellow-citizens. In war, not only what are called the laws of nations, are frequently violated, without bringing (among his own fellow-citizens, whose judgments he only regards) any considerable dishonour upon the violator; but those laws themselves are, the greater part of them, laid down with very little regard to the plainest and most obvious rules of justice. That the innocent, though they may have some connexion or dependency upon the guilty (which, perhaps, [I-384] they themselves cannot help), should not; upon that account, suffer or be punished for the guilty, is one of the plainest and most obvious rules of justice. In the most unjust war, however, it is commonly the sovereign or the rulers only who are guilty. The subjects are almost always perfectly innocent. Whenever it suits the conveniency of a public enemy, however, the goods of the peaceable citizens are seized both at land and at sea; their lands are laid waste, their houses are burnt, and they themselves, if they presume to make any resistance, are murdered or led into captivity; and all this in the most perfect conformity to what are called the laws of nations.

When we turn to the “prudent man”, AS thinks his prudence tells him not to become involved in the struggle by “factions”, “parties,” and “cabals” who seek special favors for themselves at the expense of others. In fact he “hates faction”. If he does get involved it is only done in “self-defense” in order to protect the public from the intentions of members of the party. Normally, the prudent man will not meddle in other people’s affairs and will mind his own business:

[TMS II-59-60 online]: The prudent man is not willing to subject himself to any responsibility which his duty does not impose upon him. He is not a bustler in business where he has no concern ; is not a meddler in other people's affairs ; is not a professed counsellor or adviser, who obtrudes his advice where nobody is asking it. He confines himself, as much as his duty will permit, to his own affairs, and has no taste for that foolish [II-60] importance which many people wish to derive from appearing to have some influence in the management of those of other people. He is averse to enter into any party disputes, hates faction, and is not always very forward to listen to the voice even of noble and great ambition. When distinctly called upon, he will not decline the service of his country, but he will not cabal in order to force himself into it, and would be much better pleased that the public business were well managed by some other person, than that he himself should have the trouble, and incur the responsibility, of managing it. In the bottom of his heart he would prefer the undisturbed enjoyment of secure tranquillity, not only to all the vain splendour of successful ambition, but to the real and solid glory of performing the greatest and most magnanimous actions.

This will be very hard for the prudent man to do given how pervasive the influence of “factions”, “parties,” “cabals,” and “conspiracies” were at the time AS was writing, as will be discussed below.

Whether or not AS’s writing would have any impact in alerting people to the injustices which were going on around them, and thus encourage more people to become a “just man” or a “prudent man” is something which needs to be further discussed by historians. My view is that it did for while but then petered out. But that is another story.

 

 

IV. The Reality of Power and Privilege, Faction and Fanaticism, and Corruption and Conspiracies↩

AS’s Theory of Human Behavior and Motivation in a Social Setting

The Tension between Sociability and Violence in Human Society

According to AS, the desire to cooperate and associate with others can be for various reasons:

  1. that human beings have an inherent or natural sociability which is part of their nature
  2. that they associate with others in order to pursue the self-interest of themselves and that of the other members of the group or association
  3. these interests and goals can be of two different kinds:
  4. moral and beneficial (both to the individuals and to the group) if pursued cooperatively and non-coercively. Examples include the family, the local community, one’s Church or other club, one’s business affairs
  5. immoral and beneficial to the members but deleterious to the broader community if pursued coercively at the expense of non-members of the group. Examples include restrictive trade associations, members of the established Church.
  6. these associations take place within institutions which make these actions and outcomes possible, such as courts of law which protect private property or enforce legal privileges granted to some but not all.

“Sociability” (which draws people together) and interpersonal conflict , in particular violence (which tends to drive people apart), are in a state of constant tension in human societies. AS’s purpose in his writing is to show how a society can maximise the benefits of sociability and cooperation and minimise the costs of conflict and violence by,

  1. on the one hand respecting other people’s natural rights to own property, and to trade and engage in commerce with others (“truck and barter”) and by allowing the rule of law and free markets to flourish, and
  2. on the other hand, by reducing (perhaps even eliminating) violence between individuals which involves the violation of an individual’s “natural rights”. This violence can be undertaken by individuals (thieves and robbers) or by organised groups such as by government (which tax, regulate, and engage in warfare), and vested interest groups (slave owners, merchants, manufacturers, the established Church)

The need of individuals to be sociable can lead to both good and bad outcomes. On the positive side, an individual can cooperate with others to reduce conflict (respect each others rights, solve disputes without violence), literally to socialise with others for mutual benefit (family, friends, clubs, churches), and to improve one’s material condition (engage in trade and division of labour).

On the negative side, people can cooperate with others to use violence/coercion for their own benefit at the expense of others. AS refers frequently to organised groups such as parties, factions, cabals, and conspiracies as examples of this type of “cooperation.” Unfortunately, this aspect of AS’s thought has been less well explored by scholars. He is explicit in his writing about business interests coming together to limit competition, and to lobby for privileges from the state. I believe he does something similar with political actors (such as “interests” and “factions”) which he touches upon in TMS but is not as explicit, and which thus needs further exploration and analysis.

The reason for the neglect of this aspect of AS’s thought might lie in the fact that it is hidden away in the more general discussion of sympathy, benevolence, and other matters in TMS, or perhaps because he uses examples from classical Rome and not contemporary society (to avoid offending his peers?) whereas his better known and more discussed examples in LJ and WN are drawn from medieval Europe (feudalism) or contemporary events (mercantilism, slavery, colonial policy).

The Motivation of Individuals in Society

In TMS AS makes some general observations about what motivates individuals to behave the way they do in society:

  • they seek material improvement in their lives (such as financial wealth, the acquisition of property); he called it “bettering our condition” [TMS I-121 online]
  • they seek the approval of others (“approbation”) concerning their character, achievements, and their “standing” in their community
  • they want to avoid being criticized or being held in poor regard (“disapprobation”) by their fellows
  • they admire others who are “great” in some way and wish to emulate them. What makes a person “great” might be success in one’s business or trade, achieving high political office or military rank, having high social status and “standing” as a result of birth or marrying into a particular family
  • people are ambitious to improve their “rank” or “station” in life
  • they are also very submissive and deferential to those great men they admire and wish to emulate; people tend to tolerate or ignore their “bad behaviour” (rights violations which they used to get to the top); or perhaps even seek to emulate their methods in order to advance themselves. AS himself seems to be very differential to authority (especially the monarch, even though he admits great rights violations have occurred by and because of him, and his god (see the discussion below))

The ways in which individuals can improve their condition and station in life are hinted at by AS but not always made explicit. I think it is clear that AS distinguished between two quite different ways in which individuals can improve their condition and station in life, namely a just (legitimate) means and an unjust (illegitimate) means.

The former was through peaceful and voluntary cooperation with others, the division of labour, trade and exchange, personal merit and hard work. This method can be achieved within existing institutions such as the family, one’s network of friends and neighbors, one’s employees and business associates, professional associations, the church, and so on. By engaging with others in these groups one can establish a reputation as a good friend and neighbor, a good parent and spouse, a reliable work colleague, an honest and upright person in one’s business affairs, and so on.

However the latter means showed that there is a darker side to the human impulse to cooperate with others to achieve one’s goals. Instead of doing so cooperatively and non-coercively they can resort to violence, murder, war, and the seeking and getting of numerous “powers, privileges, and immunities” from the state. Thus, some individuals get together (or “conspire”, “cabalise”) to order get what they want (wealth, higher status, rank) by violent means. This can be done also within existing institutions such as the monarchy (court, royal family, civil list), political parties (factions), the government (ministers and senior bureaucrats, MPs), the Church, the military (army, navy), and a fairly recent addition such as organised lobby groups (rent seekers) of merchants, manufacturers, and bankers. These associations and groups attract those who have a strong natural inclination to dominate others and thus take advantage of the people’s natural inclination to “defer” to their superiors.

The following quote from TMS makes this point quite clear. In order to get to the top the “candidates for fortune” often act above the law and commit fraud, falsehood, and crimes like murder and rebellion to achieve their political goals. Such men hope that “the lustre of his future conduct will entirely cover, or efface, the foulness of the steps by which he arrived at that elevation”.

[TMS I-155-56 online] To attain to this envied situation, the candidates for fortune too frequently abandon the paths of virtue; for unhappily, the road which leads to the one, and that which leads to the other, lie sometimes in very opposite directions. But the ambitious man flatters himself that, in the splendid situation to which he advances, he will have so many means of commanding the respect and admiration of mankind, and will be enabled to act with such superior propriety and grace, that the lustre of his future conduct will entirely cover, or efface, the foulness of the steps by which he arrived at that elevation. In many governments the candidates for the highest stations are above the law; and, if they can attain the object of their ambition, they have no fear of being called to account for the means by which they acquired it. They often endeavour, therefore, not only by fraud and falsehood, the ordinary and vulgar arts of intrigue and cabal; but sometimes by the perpetration of the most enormous crimes, by murder and assassination, by rebellion and civil war, to supplant and [I-156] destroy those who oppose or stand in the way of their greatness. [emphasis added]

Smith on Class and Class Conflict - an overview

Some of Smith’s ideas about class and class conflict include the following:

  1. that societies were divided into “ranks” and “orders” in which a person had a certain “station”. Each rank had their own special “power, privileges, and immunities” which they tried to protect and/or increase;
  2. that the government was a “great system” or a machine which had “wheels” which turned under the influence of “statesmen”, “factions,” “interests,” “cabals,” “conspiracies,” “party men”. “The man of system” had a particular significance for AS, as did the “fanaticism” (political or religious) of others, and the manufacturers and merchants who formed “a conspiracy against the public” in order to further their own private interests
  3. The “wheels of the machine of government” were greased by “corruption” which enabled “ambitious men” to seek, keep, and expand their “power, privileges, and immunities”
  4. that there were many “unproductive hands” who lived off the taxes produced by the labour of other men; specific examples of which included slave owners, the military, the church, and those of the Civil List
  5. that there were several groups of “rapacious” men who used the power of the state to get undeserved benefits at the expanse of ordinary workers and consumers, such as privileged merchants and manufacturers
  6. that opposition by the lower orders to the system of privilege was weak and unlikely to result in violent opposition given their natural deference to their “superiors”
  7. thus AS was pessimistic about the likelihood of the reform of society away from the “violence of faction”, the injustice of the “power, privileges, and indemnities” of those of high rank, and the more recent rent-seeking of merchants and manufacturers

Ranks, Orders, and Station

Introduction

Smith believed that societies were divided into “ranks”, “orders”, and “stations” [11] each of which had its own “particular powers, privileges, and immunities“ and that members of these different orders attempted to protect themselves from “the encroachments” of every other order and to expand their order’s own “powers, privileges and immunities” when it could.

[TMS II-101-02 online]: Every independent state is divided into many different orders and societies, each of which has its own particular powers, privileges, and immunities. Every individual is naturally more attached to his own particular order or society, than to any other. His own interest, his own vanity, the interest and vanity of many of his friends and companions, are commonly a good deal connected with it. He is ambitious to extend its privileges and immunities. He is zealous to defend them against the encroachments of every other order or society.

Upon the manner in which any state is divided into the different orders and societies which compose it, and upon the particular distribution which has been made of their respective powers, privileges, and immunities, depends, what is called, the constitution of that particular state.

Upon the ability of each particular order or society to maintain its own powers, privileges, and immunities, against the encroachments of every other, depends the stability of that particular constitution. That particular constitution is necessarily more or less altered, whenever any of its subordinate parts is either raised above or depressed below whatever had been its former rank and condition.

The Origin of “the Distinction of Ranks”

AS does not spell out in any detail what these different ranks and orders were (such as social, political, economic, religious), where they came from, what their power and privileges consisted of, and how their political power was exercised, except in vague and general terms. When he does give specific examples these are often taken from classical Roman history or 17thC France and not from his own day. There is also very little discussion of how those with rank got their wealth and position in the first place, whether it was earned legitimately or illegitimately. He suggests that some people regarded as “the great”, did not acquire their position through “the purchase either of sweat or of blood” or “by knowledge, by industry, by patience, by self–denial, or by virtue of any kind,” but by birth, which was sufficient they believed entitled them “to govern the world”.

[TMS I.iii.2.4, p. 53; I-130-33 online]: Do the great seem insensible of the easy price at which they may acquire the public admiration; or do they seem to imagine that to them, as to other men, it must be the purchase either of sweat or of blood ? By what important accomplishments is the young nobleman instructed to support the dignity of his rank, and to render himself worthy of that superiority over his fellow-citizens, to which the virtue of his ancestors had raised them? Is it by knowledge, by industry, by patience, by self-denial, or by virtue of any kind? As all his words, as all his motions are attended to, he learns an habitual regard to every circumstance of ordinary behaviour, and studies to perform all those small duties with the most exact propriety. As he is conscious how much he is observed, and how much mankind are disposed to favour all his inclinations, he acts, upon the most indifferent occasions, with that freedom and elevation which the thought of this naturally inspires. His air, his manner, his deportment, all mark that elegant and graceful sense of his own superiority, which [I-131] those who are born to inferior stations can hardly ever arrive at. These are the arts by which he proposes to make mankind more easily submit to his authority, and to govern their inclinations according to his own pleasure: and in this he is seldom disappointed. These arts, supported by rank and preheminence, are, upon ordinary occasions, sufficient to govern the world.

AS argued that the origin of the distinction of ranks lies in the “disposition of mankind” to take an interest in (“go along with” or follow) and attempt to emulate “the passions of the rich and the powerful” ; their successes and failures, their lives and deaths, the ups and downs of their social lives, their behaviour in public, and so on. They are considered to be the “natural superiors” of those who “follow” them. Those of lower rank (or no rank at all) are thus “obsequious”, deferential, and above all obedient to those of higher rank.

In another passage AS talks about “the fascination of greatness” of the rich and powerful and not for “the wise and the virtuous” by those of lower rank [TMS II-89-90 online]. His explanation for why it is “wise” to respect “the great” in spite of their excesses and possible unjust acts is rather lame, namely that “Nature has wisely judged that the distinction of ranks, the peace and order of society, would rest more securely upon the plain and palpable difference of birth and fortune, than upon the invisible and often uncertain difference of wisdom and virtue”.

To the modern reader this may seen strange until one compares this phenomenon to what we can see today in “the cult of royalty” in Australia, or the “cult of celebrity” in the US. I think the parallels are striking.

This is how AS describes it in the passage about the “disposition of mankind, to go along with all the passions of the rich and the powerful” upon which “is founded the distinction of ranks, and the order of society” and “our obsequiousness to our superiors”:

[TMS I-123-27 online]: The man of rank and distinction, on the contrary, is observed by all the world. Every [I-124] body is eager to look at him, and to conceive, at least by sympathy, that joy and exultation with which his circumstances naturally inspire him. His actions are the objects of the public care. Scarce a word, scarce a gesture, can fall from him that is altogether neglected. In a great assembly he is the person upon whom all direct their eyes ; it is upon him that their passions seem all to wait with expectation, in order to receive that movement and direction which he shall impress upon them; and if his behaviour is not altogether absurd, he has, every moment, an opportunity of interesting mankind, and of rendering himself the object of the observation and fellow-feeling of every body about him. It is this, which, notwithstanding the restraint it imposes, notwithstanding the loss of liberty with which it is attended, renders greatness the object of envy, and compensates, in the opinion of mankind, all that toil, all that anxiety, all those mortifications which must be undergone in the pursuit of it; and what is of yet more consequence, all [I-125] that leisure, all that ease, all that careless security, which are forfeited for ever by the acquisition.

When we consider the condition of the great, in those delusive colours in which the imagination is apt to paint it, it seems to be almost the abstract idea of a perfect and happy state. It is the very state which, in all our waking dreams and idle reveries, we had sketched out to ourselves as the final object of all our desires. We feel, therefore, a peculiar sympathy with the satisfaction of those who are in it. We favour all their inclinations, and forward all their wishes. What pity, we think, that any thing should spoil and corrupt so agreeable a situation! We could even with them immortal; and it seems hard to us, that death should at last put an end to such perfect enjoyment. It is cruel, we think, in Nature to compel them from their exalted stations to that humble, but hospitable home, which she has provided for all her children. Great King, live for ever! is the compliment, which, after the manner [I-126] of eastern adulation, we should readily make them, if experience did not teach us its absurdity. Every calamity that befals them, every injury that is done them, excites in the breast of the spectator ten times more compassion and resentment than he would have felt, had the same things happened to other men. It is the misfortunes of Kings only which afford the proper subjects for tragedy. They resemble, in this respect, the misfortunes of lovers. Those two situations are the chief which interest us upon the theatre ; because, in spite of all that reason and experience can tell us to the contrary, the prejudices of the imagination attach to these two states a happiness superior to any other. To disturb, or to put an end to such perfect enjoyment, seems to be the most atrocious of all injuries. The traitor who conspires against the life of his monarch, is thought a greater monster than any other murderer. All the innocent blood that was shed in the civil wars, provoked less indignation than the death of Charles I. A stranger to human nature, who saw the indifference of men about the [I-127] misery of their inferiors, and the regret and indignation which they feel for the misfortunes and sufferings of those above them, would be apt to imagine, that pain must be more agonizing, and the convulsions of death more terrible to persons of higher rank, than to those of meaner stations.

Upon this disposition of mankind, to go along with all the passions of the rich and the powerful, is founded the distinction of ranks, and the order of society. Our obsequiousness to our superiors more frequently arises from our admiration for the advantages of their situation, than from any private expectations of benefit from their good-will. Their benefits can extend but to a few; but their fortunes interest almost every body. We are eager to assist them in completing a system of happiness that approaches so near to perfection; and we desire to serve them for their own sake, without any other recompense but the vanity or the honour of obliging them.

But as is often the case with AS, there is a sting in the tail which he leaves unresolved, at least unresolved for a classical liberal who values the natural rights of the people. The passage quoted above continues with an appeal to the people to resist challenging the unjust and unreasonable behavior of those who enjoy the highest rank in society, namely kings and the royal family. “Even when the order of society seems to require that we should oppose them, we can hardly bring ourselves to do it.” “Reason and philosophy” (i.e. natural jurisprudence) may demand that they be otherthrown for their unjust treatment of the people, but “Nature” demands that they “submit” to their authority and “to submit to them for their own sake, to tremble and bow down before their exalted station”. Their crimes and peccadilloes are soon forgotten and forgiven. That one might speak to them as an equal under the law is beyond comprehension. Again it is not entirely, clear whether AS is merely reporting how people in his own day thought and behaved, or whether he was recommending this deferential and obsequious behavior as the best way to maintain order and good government.

[TMS I-127-9 online] : Neither is our deference to their inclinations founded chiefly, or altogether, upon a regard to [I-128] the utility of such submission, and to the order of society, which is best supported by it. Even when the order of society seems to require that we should oppose them, we can hardly bring ourselves to do it. That kings are the servants of the people, to be obeyed, resisted, deposed, or punished, as the public conveniency may require, is the doctrine of reason and philosophy; but it is not the doctrine of Nature. Nature would teach us to submit to them for their own sake, to tremble and bow down before their exalted station, to regard their smile as a reward sufficient to compensate any services, and to dread their displeasure, though no other evil were to follow from it, as the severest of all mortifications. To treat them in any respect as men, to reason and dispute with them upon ordinary occasions, requires such resolution, that there are few men whose magnanimity can support them in it, unless they are likewise assisted by familiarity and acquaintance. The strongest motives, the most furious passions, fear, hatred, and resentment, are scarce sufficient to balance this natural [I-129] disposition to respect them; and their conduct must, either justly or unjustly, have excited the highest degree of all those passions, before the bulk of the people can be brought to oppose them with violence, or to desire to see them either punished or deposed. Even when the people have been brought this length, they are apt to relent every moment, and easily relapse into their habitual state of deference to those whom they have been accustomed to look upon as their natural superiors. They cannot stand the mortification of their monarch. Compassion soon takes the place of resentment, they forget all past provocations, their old principles of loyalty revive, and they run to re-establish the ruined authority of their old masters, with the same violence with which they had opposed it. The death of Charles I. brought about the Restoration of the royal family. Compassion for James II. when he was seized by the populace in making his escape on ship-board, had almost prevented the Revolution, and made it go on more heavily than before.

This is how AS describes the origin of the distinction of ranks in the passage about the “the fascination of greatness” of the rich and powerful” and also argues that it is part of Nature’s “wise” plan “that the distinction of ranks, the peace and order of society, would rest more securely upon the plain and palpable difference of birth and fortune, than upon the invisible and often uncertain difference of wisdom and virtue”:

[TMS II-89-90 online] After the persons who are recommended to our beneficence, either by their connection with ourselves, by their personal qualities, or by their past services, come those who are pointed out, not indeed to, what is called, our friendship, but to our benevolent attention and good offices; those who are distinguished by their extraordinary situation; the greatly fortunate and the greatly unfortunate, the rich and the powerful, the poor and the wretched. The distinction of ranks, the peace and order of society, are, in a great measure, founded upon the respect which we naturally conceive for the former. The relief and consolation of human misery depend altogether upon our compassion for the latter. The peace and order of society, is of more importance than even the relief of the miserable. Our respect for the great, accordingly, is most apt to offend by its excess; our fellow–feeling for the miserable, by its defect. Moralists exhort us to charity and compassion. They warn us against the fascination of greatness. This fascination, indeed, is so powerful, that the rich and the great are too often preferred to the wise and the virtuous. Nature has wisely judged that the distinction of ranks, the peace and order of society, would rest more securely upon the plain and palpable difference of birth and fortune, than upon the invisible and often uncertain difference of wisdom and virtue. The undistinguishing eyes of the great mob of mankind can well enough perceive the former: it is with difficulty that the nice discernment of the wise and the virtuous can sometimes distinguish the latter. In the order of all those recommendations, the benevolent wisdom of nature is equally evident.

Some examples of those with high Rank

In this discussion of how “the great” - a “young nobleman” in Smith’s own day, and then Louis XIV in the previous century - came to have such high rank within society, AS laconically notes about the former “the easy price” he had to pay as he had inherited it, while Louis XIV had accomplishments which were “frivolous” and talents which were “not to have been much above mediocrity”. [See the quote from [TMS I.iii.2.4, p. 53; I-130-33 online above about the “young nobleman”, which continues below about King Louis XIV.]

… Lewis XIV. during the greater part of his reign, was regarded, not only in France, but over all Europe, as the most perfect model of a great prince. But what were the talents and virtues by which he acquired this great reputation? Was it by the scrupulous and inflexible justice of all his undertakings, by the immense dangers and difficulties with which they were attended, or by the unwearied and unrelenting application with which he pursued them? Was it by his extensive knowledge, by his exquisite judgment, or by his heroic valour? It was by none of these qualities. But he was, first of all, the most powerful prince in Europe, and consequently held the highest rank among kings; …

These frivolous accomplishments, supported by his rank, and, no doubt too, by a degree of other talents and virtues, which seems, however, not to have been much above mediocrity, established this prince in the esteem of his own age, and have drawn, even from posterity, a [I-133] good deal of respect for his memory. Compared with these, in his own times, and in his own presence, no other virtue, it seems, appeared to have any merit. Knowledge, industry, valour, and beneficence, trembled, were abashed, and lost all dignity before them.

In other passages it is not clear whether AS approves or disapproves of the behaviour of some “great men” who have achieved high rank and status. On the one hand he sees the unjust and brutal ways they acquire power and prestige and public admiration, yet on the other had he (or rather the “impartial spectator”) is prepared to overlook “the great injustice of their enterprises”, and sees the “utility” of public “love and admiration” for “the violence of such splendid characters” like Caesar, Alexander, Attila, Gengis, and Tamerlane because it is “necessary for establishing the distinction of ranks and the order of society”. Their actions also usefully teach us to submit to authority and to “that fortunate violence which we are no longer capable of resisting.”

[TMS VI.iii.30, pp. 252-53; TMS II-159-62 online]: The esteem and admiration which every impartial spectator conceives for the real merit of those spirited, magnanimous, and high-minded persons, as it is a just and well-founded sentiment, so it is a steady and permanent one, and altogether independent of their good or bad fortune. It is otherwise with that admiration which he is apt to conceive for their excessive self-estimation and presumption. While they are successful, indeed, he is often perfectly conquered and overborne by them. Success [II-160] covers from his eyes, not only the great imprudence, but frequently the great injustice of their enterprises ; and, far from blaming this defective part of their character, he often views it with the most enthusiastic admiration. When they are unfortunate, however, things change their colours and their names. What was before heroic magnanimity, resumes its proper appellation of extravagant rashness and folly; and the blackness of that avidity and injustice, which was before hid under the splendour of prosperity, comes full into view, and blots the whole lustre of their enterprise. Had Cæsar, instead of gaining, lost the battle of Pharsalia, his character would, at this hour, have ranked a little above that of Catiline, and the weakest man would have viewed his enterprise against the laws of his country in blacker colours, than, perhaps even Cato, with all the animosity of a party-man, ever viewed it at the time. His real merit, the justness of his taste, the simplicity and elegance of his writings, the propriety of his eloquence, his skill in war, his resources in distress, his cool and sedate [II-161] judgment judgment in danger, his faithful attachment to his friends, his unexampled generosity to his enemies, would all have been acknowledged; as the real merit of Catiline, who had many great qualities, is acknowledged at this day. But the insolence and injustice of his all-grasping ambition would have darkened and extinguished the glory of all that real merit. Fortune has in this, as well as in some other respects already mentioned, great influence over the moral sentiments of mankind, and, according as she is either favourable or adverse, can render the same character the object, either of general love and admiration, or of universal hatred and contempt. This great disorder in our moral sentiments is by no means, however, without its utility; and we may on this, as well as on many other occasions, admire the wisdom of God even in the weakness and folly of man. Our admiration of success is founded upon the same principle with our respect for wealth and greatness, and is equally necessary for establishing the distinction of ranks and the order of society. By this admiration of success we are taught [II-162] to submit more easily to those superiors, whom the course of human affairs may assign to us; to regard with reverence, and sometimes even with a sort of respectful affection, that fortunate violence which we ear no longer capable of resisting ; not only the violence of such splendid characters as those of a Cæsar or an Alexander, but often that of, the most brutal and savage barbarians, of an Attila, a Gengis; or a Tamerlane. To all such mighty conquerors the great mob of mankind are naturally disposed to look up with a wondering, though, no doubt, with a very weak and foolish admiration. By this admiration, however, they are taught to acquiesce with less reluctance under that government which an irresistible force imposes upon them, and from which no reluctance could deliver them.

It is hard to square these sentiments with what AS says elsewhere. Perhaps these are the thoughts of the “impartial spectator”, not Smith’s, who might not be so impartial as we thought. Or, it could be ironic and AS is instead just musing about how common attitudes can result in “great disorder in our moral sentiments” and an unreasonable acquiescence to unjust authority.

How men of high rank benefit from the state’s “positive law”

Again, AS is a bit coy about how exactly the high or superior ranks of society benefit from their exercise of or access to government power. Perhaps he thinks this is a fact unworthy of mention as everybody already “knows” how the system operates.

He provides a hint in a passage dealing with the difference between a “system of positive law” (which is what most governments have) and a “system of natural jurisprudence” (which is what AS thought governments should have, and hints that this is what he will address in a later work on “law and government”). The public he thinks demands that there be no “violation of justice” in the exercise of the law, and to help ensure this is the case, there are also rules regulating how judges should make decisions. The goal he thinks is to have rules which “coincide with those of natural justice” [TMS II-395-99 online] However, this is not always the case for several reasons. The first is that a “particular order” is able “to warp” the positive laws in such a way as to further their own interests. The second is that in some less civilized countries “the rudeness and barbarism of the people” hold back the development of the law of natural justice, the discovery and elaboration of which is a complex intellectual undertaking. And thirdly, the constitution (i.e. structure) of the court system prevents the establishment of "any regular system of jurisprudence.” As a result, AS concludes, that “(s)ystems of positive law, therefore … can never be regarded as accurate systems of the rules of natural justice”. Instead of “rules of natural equity” being enforced by the historically specific system of positive law in every country we see what he calls the “laws of police (i.e. government regulation) not of justice.” [TMS II-398-99]

What we are interested in here in particular are his thoughts on how a “particular order (or orders)” with high rank can “tyrannize the government” in order to get it to do their bidding. The third reason, dealing with how an “irregular” legal system prevents natural justice from being given out, will be discussed below in the section dealing with legal corruption.

The full quote of this important section follows:

[TMS II-395-99 online] > Every system of positive law may be regarded as a more or less imperfect attempt towards a system of natural jurisprudence, or towards an enumeration of the particular rules of justice. As the violation of justice is what men will never submit to from one another, the public magistrate is under a necessity of employing the power of the commonwealth to enforce the practice of this virtue. Without this precaution, civil society would become a scene of bloodshed and disorder, every man revenging himself at his own hand whenever he fancied [II-396] was injured. To prevent the confusion which would attend upon every man's doing justice to himself, the magistrate, in all governments that have acquired any considerable authority, undertakes to do justice to all, and promises to hear and to redress every complaint of injury. In all well-governed states too, not only judges are appointed for determining the controversies of individuals, but rules are prescribed for regulating the decisions of those judges; and these rules are, in general, intended to coincide with those of natural justice. It does not, indeed, always happen that they do so in every instance. Sometimes what is called the constitution of the state, that is, the interest of the government; sometimes the interest of particular orders of men who tyrannize the government, warp the positive laws of the country from what natural justice would prescribe. In some countries, the rudeness and barbarism of the people hinder the natural sentiments of justice from arriving at that accuracy and precision which, in more civilized nations, they naturally attain to. Their laws are, like their [II-397] manners, gross and rude and undistinguishing. In other countries the unfortunate constitution of their courts of judicature hinders any regular system of jurisprudence from ever establishing itself among them, though the improved manners of the people may be such as would admit of the most accurate. In no country do the decisions of positive law coincide exactly, in every case, with the rules which the natural sense of justice would dictate. Systems of positive law, therefore, though they deserve the greatest authority, as the records of the sentiments of mankind in different ages and nations, yet can never be regarded as accurate systems of the rules of natural justice.

Adam Smith confuses two kinds of Rank - social (voluntary) and political (coercive)

AS’s notion of rank and status combines two different things which makes his discussion confusing at times. Most of the time he is describing the traditional means by which high rank was “acquired”, i.e. a coercive “political means” by successful and powerful aristocratic, military, and church elites . At other times he recognizes that there another and newer means by which high rank could be “acquired”, i.e. a voluntary “economic means” by the rising commercial and industrial class. [12] Thus “high or superior rank” could be acquired in two different ways.

Firstly, rank was traditionally “acquired” as a result of the coercive power of the state or church which grants special privileges, property, legal favors, access to power (the court or parliament) which are denied “ordinary people” who thus have “inferior rank”. Most of the examples AS gives of people with high rank acquired that rank by being a powerful and successful military leader, a monarch, or member of the high nobility. A few acquired their high rank because of success in business or banking but these people are not admired by the former group. Even if these high ranking individuals ”behave badly” (as AS notes frequently that they do) they will continue to retain their high rank with all its attendant “powers, privileges, and immunities”.

Secondly, “from the bottom up” as it were, where “ordinary” people or people of “inferior rank” voluntarily recognise , admire and defer to a person of “superior rank” because of their birth (into a renowned or famous family), their achievements in life, their skill in their profession, their wealth, and the wisdom they show in solving problems. Their admiration for those of higher rank and status might only continue for as long as the person of “higher rank” continues to act in an admirable way. If the person with higher rank behaves in an unacceptable manner ordinary people would withdraw their respect and admiration for that person, who would then lose their higher rank in the eyes of the people. This is an example of “the voluntary means of acquiring rank”.

This “voluntary means” might also result from a “top down” but still voluntary process where those people who consider themselves to be of “higher or superior rank” exclude (i.e. ostracise) those people who are regarded a being of “inferior rank” from various aspects of their lives such as social events, marriages, restaurants and clubs, without resorting to the coercive powers of the state.

Problems arose when increasing numbers of new wealthy but “socially inferior” people aspire to higher status or rank in a society but are excluded both socially and politically. AS discusses the example of the ambitious but more lowly ranked man [see below for details.]

In AS’s day, the vast majority of those with high rank acquired their station as a result of the “top down” coercive means. As economic growth and industrial activity flourished this allowed an increasing number of individuals to acquire wealth and property and thus become objects of admiration and respect. Thus the group of people who enjoyed high rank began to include economic and industrial elites in addition to the more traditional political, military, and church elites who enjoyed “superior rank.”

Imagining a “Rank-free” society

It is interesting that AS in two places speculates about a situation where rank has disappeared or is no longer of significance. Throughout his discussion it is not clear whether AS is just being descriptive of the current historical situation in which he lived, describing the views people had of the rank and status of those around them and the actual “constitution of the state”, and when he is offering the reader normative judgements of the justice or utility of a society based on “the distinction of ranks” with a government which protected the “particular powers, privileges, and immunities“ of those with high rank.

The first of AS’s speculations is a version of the “invisible hand” argument where, in this case, the high ranking “proud and unfeeling landlord” in his “palace” unintentionally provides enough food and employment to the poor who “who seemed to have been left out in the partition” of worldly goods, and in the process “the invisible hand” does its magic and creates a situation where “all the different ranks of life are nearly upon a level.” The full quote is a s follows:

[TMS I-463-67 online]: Our imagination, which in pain and sorrow seems to be confined and cooped up within our own persons, in times of ease and prosperity expands itself to every thing around us. We are then charmed with the beauty of that accommodation which reigns in the palaces and œconomy of the great; and admire how every thing is adapted to promote their ease, to prevent their wants, to gratify their wishes, and to amuse and entertain their most frivolous desires. If we consider the real satisfaction which all these things are capable of affording, by itself and separated from the beauty of that arrangement which is fitted to promote it, it will always appear in the highest degree contemptible and trifling. But we rarely view it in this abstract and philosophical light. We naturally confound it in [I-464] our imagination with the order, the regular and harmonious movement of the system, the machine or œconomy by means of which it is produced. The pleasures of wealth and greatness, when considered in this complex view, strike the imagination as something grand and beautiful and noble, of which the attainment is well worth all the toil and anxiety which we are so apt to bestow upon it.

And it is well that nature imposes upon us in this manner. It is this deception which rouses and keeps in continual motion the industry of mankind. It is this which first prompted them to cultivate the ground, to build houses, to found cities and commonwealths, and to invent and improve all the sciences and arts, which ennoble and embellish human life; which have entirely changed the whole face of the globe, have turned the rude forests of nature into agreeable and fertile plains, and made the trackless and barren ocean a new fund of subsistence, and the great high road of communication to the different nations of the [I-465] earth. The earth by these labours of mankind has been obliged to redouble her natural fertility, and to maintain a greater multitude of inhabitants. It is to no purpose, that the proud and unfeeling landlord views his extensive fields, and without a thought for the wants of his brethren, in imagination consumes himself the whole harvest that grows upon them. The homely and vulgar proverb, that the eye is larger than the belly, never was more fully verified than with regard to him. The capacity of his stomach bears no proportion to the immensity of his desires, and will receive no more than that of the meanest peasant. The rest he is obliged to distribute among those, who prepare, in the nicest manner, that little which he himself makes use of, among those who fit up the palace in which this little is to be consumed, among those who provide and keep in order all the different baubles and trinkets, which are employed in the œconomy of greatness; all of whom thus derive from his luxury and caprice, that share of the necessaries of life, which they would in vain [I-466] have expected from his humanity or his justice. The produce of the soil maintains at all times nearly that number of inhabitants which it is capable of maintaining. The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left [I-467] out in the partition. These last too enjoy their share of all that it produces. In what constitutes the real happiness of human life, they are in no respect inferior to those who would seem so much above them. In ease of body and peace of mind, all the different ranks of life are nearly upon a level, and the beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for.

The second example occurs when AS speculates about “the world to come, where exact justice will be done to every man, where every man will be ranked with those who, in the moral and intellectual qualities, are really his equals,” and where those had unacknowledged merit in this world "will be placed upon a level, and sometimes above those who, in this world, had enjoyed the highest reputation.”

The full quote is as follows:

[TMS I-324-27 online]: In such cases, the only effectual consolation of humbled and afflicted man lies in an appeal to a still higher tribunal, to that of the all-seeing Judge of the world, whose eye can never be deceived, and whose judgments can never be perverted. A firm confidence in the unerring rectitude of this [I-325] great tribunal, before which his innocence is in due time to be declared, and his virtue to be finally rewarded, can alone support him under the weakness and despondency of his own mind, under the perturbation and astonishment of the man within the breast, whom nature has set up as, in this life, the great guardian, not only of his innocence, but of his tranquillity. Our happiness in this life is thus, upon many occasions, dependent upon the humble hope and expectation of a life to come: a hope and expectation deeply rooted in human nature; which can alone support its lofty ideas of its own dignity; can alone illumine the dreary prospect of its continually approaching mortality, and maintain its cheerfulness under all the heaviest calamities to which, from the disorders of this life, it may sometimes be exposed. That there is a world to come, where exact justice will be done to every man, where every man will be ranked with those who, in the moral and intellectual qualities, are really his equals ; where the owner of those [I-326] humble talents and virtues which, from being depressed by fortune, had, in this life, no opportunity of displaying themselves ; which were unknown, not only to the public, but which he himself could scarce be sure that he possessed, and for which even the man within the breast could scarce venture to afford him any distinct and clear testimony; where that modest, silent, and unknown merit, will be placed upon a level, and sometimes above those who, in this world, had enjoyed the highest reputation, and who, from the advantage of their situation, had been enabled to perform the most splendid and dazzling actions; is a doctrine, in every respect so venerable, so comfortable to the weakness, so flattering to the grandeur of human nature, that the virtuous man who has the misfortune to doubt of it, cannot possibly avoid wishing most earnestly and anxiously to believe it. It could never have been exposed to the derision of the scoffer, had not the distribution of rewards and punishments, which some of its most zealous assertors have taught us was to be [I-327] made in that world to come, been too frequently in direct opposition to all our moral sentiments.

Neither of these examples of a rank-free society are particularly convincing in my view, but they are interesting insights into AS’s thinking on the matter.

An Aside on the “Visible Hand”

AS’s notion of the “invisible hand” is well known, however he also made reference to a “visible hand” twice in TMS which should be noted, the hand of the pickpocket and that of the “man of system” who moves people about “the great chess board of human society.”

The first occurrence is in a discussion about the different punishments metered out to a pick pocket who whose hand is seen and caught before or after stealing an item:

[TMS I-252 online]: The resentment of mankind, however, runs so high against this crime (murder), their terror for the man who shows himself capable of committing it, is so great, that the mere attempt to commit it ought in all countries to be capital. The attempt to commit smaller crimes is almost always punished very lightly, and sometimes is not punished at all. The thief, whose hand has been caught in his neighbour's pocket before he had taken any thing out of it, is punished with ignominy only. If he had got time to take away an handkerchief, he would have been put to death. The housebreaker, who has been found setting a ladder to his neighbour's window, but had not got into it, is not exposed to the capital punishment. The attempt to ravish is not punished as a rape. The attempt to seduce a married woman is not punished at all, though seduction is punished severely. Our resentment against the person who only attempted to do a mischief, is seldom so strong as to bear us out in inflicting the same punishment upon him, which we should have thought due if he had actually done it.

The second occurs in his discussion of “the man of system” who thinks of society as one giant chess board, and individuals in that society as merely chess pieces which his hand can move about at will across the board:

[TMS II-110-11; online]: The man of system , on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess board of human society, every single piece has a principle of motion. of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide [II-111] and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.

The Wheels and Springs of the Political Machine

Introduction

Above the ranks and orders of society was “the great system of government” or the “political machine” which had “wheels” and “springs” and a “beautiful, orderly, and regular motion” [TMS IV.1.11, p. 185; I-468 online]. Sometimes the movement of the wheels became obstructed, or the separate parts of the machine would not work together in a “harmonious and smooth” manner which then required the intervention of farseeing and benevolent “statesmen,” “princes,” and “patriots” to remove the obstacles and grease the wheels.

At other times the smooth operation of the “political machine” was disrupted by the infighting and jostling for power in order to control the levers of the machine by “ambitious men” seeking power, the rivalry between different political “factions” led by “party men” , and more threateningly by “men of system” who had grandiose plans to completely rebuild the machine from the ground up.

In TMS AS made reference to machines 26 times. Several were just that, machines like carriages to transport people or devices used in factories to produce things. At other times, there is a metaphorical use of the word as in “the great machine of the universe” with its “secret wheels and springs” [TMS I-32 online]; or it is used to describe “power and riches” which he described as “enormous and operose machines contrived to produce a few trilling conveniencies to the body” which also had “the most and delicate” of springs [TMS I-462 online].

But what is of interest to us here is his use of word “machine” to describe the structure and operation of the government, and how certain types of people gained control of the buttons and levers (not terms he used) which put the “great machine of government” in motion.

For example AS states that:

[TMS I-468 online]: The perfection of police, the extension of trade and manufactures, are noble and magnificent objects. The contemplation of them pleases us, and we are interested in whatever can tend to advance them. They make part of the great system of government, and the wheels of the political machine seem to move with more harmony and ease by means of them. We take pleasure in beholding the perfection of so beautiful and grand a system, and we are uneasy till we remove any obstruction that can in the least disturb or encumber the regularity of its motions. All constitutions of government, however, are valued only in proportion as they tend to promote the happiness of those who live under them. This is their sole use and end.

And a little bit later:

the great system of public police which procures these advantages, … the connexions and dependencies of its several parts, their mutual subordination to one another, and their general subserviency to the happiness of the society; … how those obstructions might be removed, and all the several wheels of the machine of government be made to move with more harmony and smoothness, without grating upon one another, or mutually retarding one another's motions … (the patriot) will, at least for the moment, feel some desire to remove those obstructions, and to put into motion so beautiful and so orderly a machine

What follows is a discussion of the types of men who controlled and operated “the machine of government” and for what purposes.

Statesmen and Princes

At the pinnacle of political power are the leading “Statesmen” and Princes. They can sometimes rule wisely by being prudent in their policy making and applying the “positive law” of the country in a way which adheres as closely as possible to the principles of natural justice. More often, they are diverted from this course by their personal ambition, their vanity, their susceptibility to the flattery they receive in court, they are “captured” (not AS’s word) by the powerful vested interests which surround them, or they become “political speculators” or “men of system” who are enamored with wild schemes to reform society from top to bottom.

AS thought that it was natural for people to pursue their self-interest so long as it remained “within the bounds of prudence and justice”. Thus he thinks it quite reasonable, for example, that “We should despise a prince who was not anxious about conquering or defending a province”:

[TMS I-435-36 online]: We should despise a prince who was not anxious about conquering or defending a province. We should have little respect for a private gentleman who did not exert himself to gain an estate, or even a considerable office, when he could acquire them without either meanness or injustice. A member of parliament who shews no keenness about his own election, is abandoned by his friends, as altogether unworthy of their attachment. Even a tradesman is thought a poor-spirited fellow among his neighbours, who does not bestir himself [I-436] to get what they call an extraordinary job, or some uncommon advantage.

Concerning the problem of “vanity”, AS argued that “great men”, such as “the most successful warriors, the greatest statesmen and legislators, the eloquent founders and leaders of the most numerous and most successful sects and parties”, achieved their “great success” because of their great self-confidence or what he termed their "excessive self-admiration”. They needed this “presumption and self-admiration” in order to spur themselves into action and “to command the submission and obedience of their followers to support them in such undertakings”. However, their great success in these endeavors “often betrayed them into a vanity that approached almost to insanity and folly.” In this lengthy passage he makes these points in the context of discussing the historical examples from the classical period of Alexander the Great and Julius Cæsar , and from more recent history Duke of Marlborough, the King of Prussia, the Prince of Conde, and Gustavus Adolphus (these have been cut for reason of space):

[TMS II-155-59; online]: Great success in the world, great authority over the sentiments and opinions of mankind, have very seldom been acquired without some degree of this excessive self-admiration. The most splendid characters, the men who have performed the most illustrious actions, who have brought about the greatest revolutions, both in the situations [II-156] and opinions of mankind; the most successful warriors, the greatest statesmen and legislators, the eloquent founders and leaders of the most numerous and most successful sects and parties; have many of them been, not more distinguished for their very great merit, than for a degree of presumption and self-admiration altogether disproportioned even to that very great merit. This presumption was, perhaps, necessary, not only to prompt them to undertakings which a more sober mind would never have thought of, but to command the submission and obedience of their followers to support them in such undertakings. When crowned with success, accordingly, this presumption has often betrayed them into a vanity that approached almost to insanity and folly. … The religion and manners of modern times give our great men little encouragement to fancy themselves either Gods or even Prophets. Success, however, joined to great popular favour, has often so far turned the heads of the greatest of them, as to make them ascribe to themselves both an importance and an ability much beyond what they really possessed; and, by this presumption, to precipitate themselves into many rash and sometimes ruinous adventures. ...

AS provides another example of great men whose ambition exceeded “the bounds of prudence and justice”, and was even “altogether devoid of justice” such as those of the Cardinals of Richlieu and of Retz:

[TMS I-436 online]: Those great objects of self-interest, of which the loss or acquisition quite changes the rank of the person, are the objects of the passion properly called ambition; a passion, which when it keeps within the bounds of prudence and justice, is always admired in the world, and has even sometimes a certain irregular greatness, which dazzles the imagination, when it passes the limits of both these virtues, and is not only unjust but extravagant. Hence the general admiration for heroes and conquerors, and even for statesmen, whose projects have been very daring and extensive, though altogether devoid of justice; such as those of the Cardinals of Richlieu and of Retz. The objects of avarice and ambition differ only in their greatness. A miser is as furious about a halfpenny, as a man of ambition about the conquest of a kingdon.

Princes and statesmen who are ambitious for success and are vane about their abilities are liable to be swayed by the “flattery” of courtiers and those of high rank seeking additional “power, privileges, and immunities.” The sweet words of these flatterers and privilege seekers can push to the side the wiser and more prudent council of “a warrior, a statesman, a philosopher, or a legislator”.

[TMS I-151-52 online]: In the superior stations of life the case is unhappily not always the same. In the courts of princes, in the drawing-rooms of the great, where success and preferment depend, not upon the esteem of intelligent and well-informed equals, but upon the [I-152] fanciful and foolish favour of ignorant, presumptuous, and proud superiors ; flattery and falsehood too often prevail over merit and abilities. In such societies the abilities to please, are more regarded than the abilities to serve. In quiet and peaceable times, when the storm is at a distance, the prince, or great man, wishes only to be amused, and is even apt to fancy that he has scarce any occasion for the service of any body, or that those who amuse him are sufficiently able to serve him. The external graces, the frivolous accomplishments of that impertinent and foolish thing called a man of fashion, are commonly more admired than the solid and masculine virtues of a warrior, a statesman, a philosopher, or a legislator. All the great and awful virtues, all the virtues which can fit, either for the council, the senate, or the field, are, by the insolent and insignificant flatterers, who commonly figure the most in such corrupted societies, held in the utmost contempt and derision. When the duke of Sully was called upon by Lewis the Thirteenth, to give his advice in some [I-153] great emergency, he observed the favourites and courtiers whispering to one another, and smiling at his unfashionable appearance.

Perhaps for AS an even greater danger to good government was for a Prince or Statesman to become a “political speculator” in their own right. [TMS VI.ii.2.18, p. 234; online] Many philosophers and political reformers had “some general, and even systematical, idea of the perfection of policy and law” [TMS II-111-12 online] which they wanted to put into practice. AS famously called them “the man of system”[13] who was a special kind of politician who sought to control the machinery of government in order to implement some utopian scheme to completely reformulate or restructure the nature of politics. AS thinks that these “men of system” often start out intending “nothing but their own aggrandisement” but end up becoming fanatical true believers in their cause (“this fanaticism”) and “the dupes of their own sophistry”. [TMS VI.ii.2.16, p. 233. online]

The options available to the “man of system” to do this was either to gain control of the state themselves and impose their “system” on society, or to persuade the existing ruler, the Prince or the leading Statesman, to adopt the plan and introduce it for them. AS thought that the Prince or Statesman who agreed to do this had a “high degree of arrogance” in believing that their conception of a better society was the right one and should thus override the views of everybody else, that they were wise and knowledgeable about how society functioned, and how it could be changed successfully. AS concluded that Princes and Statesmen who thought like this had got things backwards, and that they were wrong to “consider the state as made for themselves, not themselves for the state.” It was another example in AS’s mind of how “the interest of particular orders of men who tyrannize the government,” and thus “warp the positive laws of the country from what natural justice would prescribe”. [TMS VII.iv.36, p. 341; II-396-7 online]

The full quote is as follows:

[TMS II-111-12 online]: Some general, and even systematical, idea of the perfection of policy and law, may, no doubt be necessary for directing the views of the statesman. But to insist upon establishing, and upon establishing all at once, and in spite of all opposition, every thing which that idea may seem to require, must often be the highest degree of arrogance. It is to erect his own judgment into the supreme standard of right and wrong. It is to fancy himself the only wise and worthy man in the commonwealth, and that his fellow-citizens should accommodate themselves to him and not he to them. It is of all political speculators, sovereign princes are by far the most dangerous. This arrogance is perfectly familiar to them. [II-112] They entertain no doubt of the immense superiority of their own judgment. When such imperial and royal reformers, therefore, condescend to contemplate the constitution of the country which is committed to their government, they seldom see any thing so wrong in it as the obstructions which it may sometimes oppose to the execution of their own will. They hold in contempt the divine maxim of Plato, and consider the state as made for themselves, not themselves for the state. The great object of their reformation, therefore, is to remove those obstructions; to reduce the authority of the nobility; to take away the privileges of cities and provinces, and to render both the greatest individuals and the greatest orders of the state, as incapable of opposing their commands, as the weakest and most insignificant.

Factions, Parties, Cabals, and Conspiracies

In AS’s theory of government, below the higher ranks and orders came a complex mixture of factions, parties, cabals and conspiracies which were made up of individuals and vested interests who sought to pursue their interests via the coercive powers of the state.

AS does not make it clear what exactly the distinction is between a “faction” and a “party” but from the context it would appear that “faction” involves considerable violence and suggests an attempt by one group to overthrow another group and seize control of the state; while “party” refers to the more normal and less violent struggle within a government to control policy or to bend it in a direction more favorable to its members particular interests. However the exact difference between the two remains unclear.

Faction and Party

Smith spends some time talking about the “factions” which sought to gain control of the government and refers to “faction” 22 times in the TMS, and to “the violence of faction” three times. He also refers to factions in WN 20 times. He refers to “party” or “parties” 28 times in TMS and “party-man” 3 times.

He thinks these factions can be “civil” or “ecclesiastical” in composition, that there is great “animosity” between the “hostile and furious factions,” and that the resulting conflict creates “turbulence and disorder” in society and can result in the undermining and weakening of morality in general, or as he put it, faction in politics is the great “corrupter of moral sentiments”. Morality can be be so disturbed by “the violence of faction” that the impartial spectator gets pushed aside and is no longer able to perform his duty

Furthermore, in the heat of the moment the victorious faction can be seduced by “the spirit of system” to attempt to completely remake the constitution of the state with potentially catastrophic results for society, although AS also admits it may provide an opportunity for “the leader of the successful party,” to become an innovative ruler to gain “glory” for founding a new state. AS also makes a cryptic reference to there being “laws of faction” which can be discovered by a study of how factions form and operate, but unfortunately he does not go into any details.

This long passage from TMS gives a good sense of AS’s thoughts on faction, faction infighting’s similarity to foreign wars, and the sometimes difficult relationship between the leader of a faction and his followers;

[TMS VI.ii.2.15, p. 232; II105-108 online]: Foreign war and civil faction are the two situations which afford the most splendid opportunities for the display of public spirit. The hero who serves his country successfully in foreign war gratifies the wishes of the whole nation, and is, upon that account, the object of universal gratitude and admiration. In times of civil discord, the leaders of the contending parties, though they may be admired by one half of their fellow-citizens, are commonly execrated by the other. Their characters and the merit of their respective services appear commonly more doubtful. The glory which is acquired by [II-106] foreign war is, upon this account, almost always more pure and more splendid than that which can be acquired in civil faction.

The leader of the successful party, however, if he has authority enough to prevail upon his own friends to act with proper temper and moderation (which he frequently has not), may sometimes render to his country a service much more essential and important than the greatest victories and the most extensive conquests. He may re-establish and improve the constitution, and from the very doubtful and ambiguous character of the leader of a party, he may assume the greatest and noblest of all characters, that of the reformer and legislator of a great state; and, by the wisdom of his institutions, secure the internal tranquillity and happiness of his fellow-citizens for many succeeding generations,

Amidst the turbulence and disorder of faction, a certain spirit of system is apt to mix itself with that public spirit which is founded upon the love of humanity, upon a real fellow-feeling with the inconveniences [II-107] and distresses to which some of our fellow-citizens may be exposed. This spirit of system commonly takes the direction of that more gentle public spirit; always animates it, and often inflames it even to the madness of fanaticism. The leaders of the discontented party seldom fail to hold out some plausible plan of reformation which, they pretend, will not only remove the inconveniences and relieve the distresses immediately complained of, but will prevent, in all time coming, any return of the like inconveniences and distresses. They often propose, upon this account, to new-model the constitution, and to alter, in some of its most essential parts, that system of government under which the subjects of a great empire have enjoyed, perhaps, peace, security, and even glory, during the course of several centuries together, The great body of the party are commonly intoxicated with the imaginary beauty of this ideal system, of which they have no experience, but which has been represented to them in all the most dazzling colours in which the eloquence of their leaders [II-108] could paint it. Those leaders themselves, though they originally may have meant nothing but their own aggrandisement, become many of them in time the dupes of their own sophistry, and are as eager for this great reformation as the weakest and foolishest of their followers. Even though the leaders should have preserved their own heads, as indeed they commonly do, free from this fanaticism, yet they dare not always disappoint the expectation of their followers; but are often obliged, though contrary to their principle and their conscience, to act as if they were under the common delusion. The violence of the party, refusing all palliatives, all temperaments, all reasonable accommodations, by requiring too much frequently obtains nothing; and those inconveniences and distresses which, with a little moderation, might in a great measure have been removed and relieved, are left altogether without the hope of a remedy.

This passage mentions two different kinds of hostile factions, “civil” and “ecclesiastical”, how “fanaticism” can drive members of a faction to commit violent acts against their opponents, how the violence of factions distracts a nation, and how it can lead to the “impartial spectator” being pushed aside, leaving only a few upright men of judgement to council restraint. The result in AS’s view is that “Of all the corrupters of moral sentiments, therefore, faction and fanaticism have always been by far the greatest.” This was also a view shared by his friend David Hume who wrote to him that “Faction, next to Fanaticism, is, of all passions, the most destructive of Morality. [Corr. letter from Hume to Smith, February 13, 1774, no. 141].

[TMS III.3.43, p. 155.; I-384-86 online]: The animosity of hostile factions, whether civil or ecclesiastical, is often still more furious than that of hostile nations; and their conduct towards one another is often still more atrocious. What may be called the laws of faction have often been laid down by grave authors with still less regard to the rules of justice than what are called the [I-385] laws of nations. The most ferocious patriot never stated it as a serious question, Whether faith ought to be kept with public enemies? -- Whether faith ought to be kept with rebels ? Whether faith ought to be kept with heretics ? are questions which have been often furiously agitated by celebrated doctors both civil and ecclesiastical. It is needless to observe, I presume, that both rebels and heretics are those unlucky persons, who, when things have come to a certain degree of violence, have the misfortune to be of the weaker party. In a nation distracted by faction, there are, no doubt, always a few, though commonly but a very few, who preserve their judgement untainted by the general contagion. They seldom amount to more than, here and there, a solitary individual, without any influence, excluded, by his own candour, from the confidence of either party, and who, though he may be one of the wisest, is necessarily, upon that very account, one of the most insignificant men in the society. All such people are held in contempt and derision, frequently in [I-386] detestation, by the furious zealots of both parties. A true party-man hates and despises candour; and, in reality, there is no vice which could so effectually disqualify him for the trade of a party-man as that single virtue. The real, revered, and impartial spectator, therefore, is, upon no occasion, at a greater distance than amidst the violence and rage of contending parties. To them, it may be said, that such a spectator scarce exists any where in the universe. Even to the great Judge of the universe, they impute all their own prejudices, and often view that Divine Being as animated by all their own vindictive and implacable passions. Of all the corrupters of moral sentiments, therefore, faction and fanaticism have always been by far the greatest.

The violence of faction can also lead members of the defeated party to seek revenge. They hide (“dissimulate”) their true feelings (their “furious animosities”) until it is safe to act against their enemies:

[TMS,VI. iii. 12: 242; II-130-32 online]: The command of fear, the command of anger, are always great and noble powers. When they are directed by justice and benevolence, they are not only great virtues, but increase the splendour of those other virtues. They may, however, sometimes be directed by very different motives; and in this case, though still great and respectable, they may be excessively dangerous. The most intrepid valour may be employed in the cause of the greatest injustice. Amidst great provocations, apparent tranquillity and good humour may sometimes conceal the most determined and cruel resolution to revenge. The strength of mind requisite for such dissimulation, though always and necessarily contaminated by the baseness of falsehood, has, however, been often much admired by many people of no contemptible [II-131] judgment. The dissimulation of Catharine of Medicis is often celebrated by the profound historian Davila ; that of Lord Digby, afterwards Earl of Bristol, by the grave and conscientious Lord Clarendon; that of the first Ashley Earl of Shaftesbury, by the judicious Mr. Locke. Even Cicero seems to consider this deceitful character, not indeed as of the highest dignity, but as not unsuitable to a certain flexibility of manners, which, he thinks, may, notwithstanding, be, upon the whole, both agreeable and respectable. He exemplifies it by the characters of Homer's Ulysses, of the Athenian Themistocles, of the Spartan Lysander, and of the Roman Marcus Crassus. This character of dark and deep dissimulation occurs most commonly in times of great public disorder ; amidst the violence of faction and civil war. When law has become in a great measure impotent, when the most perfect innocence cannot alone insure safety, regard to self-defence obliges the greater part of men to have recourse to dexterity, to address, and to apparent accommodation to whatever happens to be, at the moment, [II-132] the prevailing party. This false character, too, is frequently accompanied with the coolest and most determined courage. The proper exercise of it supposes that courage, as death is commonly the certain consequence of detection. It may be employed indifferently, either to exasperate or to allay those furious animosities of adverse factions which impose the necessity of assuming it; and though it may sometimes be useful, it is at least equally liable to be excessively pernicious.

AS expands on these ideas in WN in a discussion of how political and religious factions can sometimes form an alliance to further their own interests. The religious sect which is smart enough to ally itself with “the conquering (political) party” can get the “civil magistrate” to use the power of the state “to silence and subdue all its adversaries” and to “bestow an independent provision on themselves”, i.e. to get an income paid by the state out of taxes imposed on all citizens.

[WN,V i.g.7:791-92; online] BUT whatever may have been the good or bad effects of the independent provision of the clergy; it has, perhaps, been very seldom bestowed upon them from any view to those effects. Times of violent religious controversy have generally been times of equally violent political faction. Upon such occasions each political party has either found it, or imagined it, for its interest to league [II-379] itself with some one or other of the contending religious sects. But this could be done only by adopting, or at least by favouring, the tenets of that particular sect. The sect which had the good fortune to be leagued with the conquering party, necessarily shared in the victory of its ally, by whose favour and protection it was soon enabled in some degree to silence and subdue all its adversaries. Those adversaries had generally leagued themselves with the enemies of the conquering party, and were therefore the enemies of that party. The clergy of this particular sect having thus become complete masters of the field, and their influence and authority with the great body of the people being in its highest vigour, they were powerful enough to over-awe the chiefs and leaders of their own party, and to oblige the civil magistrate to respect their opinions and inclinations. Their first demand was generally, that he should silence and subdue all their adversaries; and their second, that he should bestow an independent provision on themselves. As they had generally contributed a good deal to the victory, it seemed not unreasonable that they should have some share in the spoil. They were weary besides of humouring the people, and of depending upon their caprice for a subsistence. In making this demand therefore they consulted their own case and comfort, without troubling themselves about the effect which it might have in future times upon the influence and authority of their order. The civil magistrate, who could comply with this demand only by giving them something which he would have chosen much rather to take or to keep to himself, was seldom very forward to grant it. Necessity, however, always forced him to submit at last, though frequently not till after many delays, evasions, and affected excuses.

Another example of faction can be found in WN. This one concerns the faction infighting in the American colonies, about which AS had a lot to say.[14] In this discussion AS notes that “rancorous and virulent factions” are common in small democracies; that if the colonies were successful in gaining independence they would without central control from London (“the coercive power of the mother country”) become “ten times more virulent than ever” and result in “open violence and bloodshed”; and that the colonies would in fact benefit from being far away from the centre of the empire since the “spirit of party” is less strong in the provinces than in the capital which is “the principal seat of the great scramble of faction and ambition”:

[WN II-584-85 online]: NO oppressive aristocracy has ever prevailed in the colonies. Even they, however, would, in point of happiness and tranquillity, gain considerably by a union with Great Britain. It would, at least, deliver them from those rancorous and virulent factions which are inseparable from small democracies, and which have so frequently divided the affections of their people, and disturbed the tranquillity of their governments, in their form so nearly democratical. In the case of a total separation from Great Britain, which, unless prevented by a union of this kind, seems very likely to take place, those factions would be ten times more virulent than ever. Before the commencement of the present disturbances, the coercive power of the mother country had always been able to restrain those factions from breaking out into any thing worse than gross brutality and insult. If that coercive power was entirely taken away, they would probably soon break out into open violence and bloodshed. In all great countries which are united under one uniform government, the spirit of party commonly prevails less in the remote provinces, than in the center of the empire. The distance of those provinces from the capital, from the principal seat of the great scramble of faction and ambition, makes them enter less into the views of any of the contending parties, and renders them more indifferent and impartial spectators of the conduct of all. The spirit of party prevails less in Scotland than in England. [II-585] In the case of a union it would probably prevail less in Ireland than in Scotland, and the colonies would probably soon enjoy a degree of concord and unanimity at present unknown in any part of the British empire. Both Ireland and the colonies, indeed, would be subjected to heavier taxes than any which they at present pay. In consequence, however, of a diligent and faithful application of the public revenue towards the discharge of the national debt, the greater part of those taxes might not be of long continuance, and the public revenue of Great Britain might soon be reduced to what was necessary for maintaining a moderate peace establishment.

Factions and the “ambitious man”

Factions and party attract the attention of the politically “ambitious man” both from the lower ranks as well as from the superior ranks. Smith has some acute insights into the behavior and motivation of the “ambitious man” who makes himself a “candidate for fortune” in the system of government.

We have already discussed the passage in TMS [TMS I-155-56] about “the candidates for fortune (who) too frequently abandon the paths of virtue” and of justice.

In a discussion of an ambitious man who who is also a vain man AS describes how such a person goes about the circles of power announcing his intentions and hoping to be noticed by those who are powerful and influential.

[TMS VI.iii.40, p. 257; II-172-73 online]: It is quite otherwise with the vain man. He courts the company of his superiors as much as the proud man shuns it. Their splendour, he seems to think, reflects a splendour upon those who are much about them. He haunts the courts of kings and the levees of ministers, and gives himself the air of being a candidate for fortune and preferment, when in reality he possesses the much more precious happiness, if he knew how to enjoy it, of not being one. He is fond of being admitted to the tables of the great, and still more fond of magnifying to other people the familiarity with which he is honoured there. He associates himself, as much as he can, with fashionable people, with those who are supposed to direct the public opinion, with the witty, with the learned, with the popular; and he shuns the company of his best friends whenever the very uncertain current of public favour happens to run in any respect against them. With the people to whom he wishes to recommend himself, he is not always very delicate about the means which he employs for that purpose ; unnecessary [II-173] ostentation, groundless pretensions, constant ostentation, frequently flattery, though for the most part a pleasant and a sprightly flattery, and very seldom the gross and fulsome flattery of a parasite. The proud man, on the contrary, never flatters, and is frequently scarce civil to any body.

In this passage AS describes another kind of man of inferior rank who is ambitious to ingratiate himself with his superiors and perhaps become a member of a party or faction. This type of man is not vain but has some “superior knowledge” or skill in their given profession and demonstrate “superior industry in the exercise of it”. This is necessary in order to make the money he needs to buy or “acquire dependents” or political clients who will support him on his climb up the political ladder. He even “looks forward with satisfaction to the prospect of foreign war, or civil dissension” so he can push himself forward and make a name for himself. From this AS concludes that “In all governments accordingly, even in monarchies, the highest offices are generally possessed, and the whole detail of the administration conducted, by men who were educated in the middle and inferior ranks of life, who have been carried forward by their own industry and abilities”.

Yet, in spite of their political success, these successful men of lower rank harbour great resentment towards “those who were born their superiors” and thus had a much easier path into power. This resentment sets up a semi-permanent struggle between “the man of spirit and ambition” and “the man of rank and distinction.”

[TMS I-133-37; online]: But it is not by accomplishments of this kind, that the man of inferior rank must hope to distinguish himself. Politeness is so much the virtue of the great, that it will do little honour to any body but themselves. The coxcomb, who imitates their manner, and affects to be eminent by the superior propriety of his ordinary behaviour, is rewarded with a double share of contempt for his folly and presumption. Why should the man, whom nobody thinks it worth while to look at, be very anxious about the manner in which he holds up his head, or disposes of his arms while he walks through a room? He is occupied surely with a very fuperfluous attention, and with an attention too that marks a sense of his own importance, which no other mortal can go along [I-134] with. The most perfect modesty and plainness, joined to as much negligence as is consistent with the respect due to the company, ought to be the chief characteristics of the behaviour of a private man. If ever he hopes to distinguish himself, it must be by more important virtues. He must acquire dependants to balance the dependants of the great, and he has no other fund to pay them from, but the labour of his body, and the activity of his mind. He must cultivate these therefore: he must acquire superior knowledge in his profession, and superior industry in the exercise of it. He must be patient in labour, resolute in danger, and firm in distress. These talents he must bring into public view, by the difficulty, importance, and, at the same time, good judgment of his undertakings, and by the severe and unrelenting application with which he pursues them. Probity and prudence, generosity and frankness, must characterize his behaviour upon all ordinary occasions; and he must, at the same time, be forward to engage in all those situations, in which it requires the greatest talents and [I-135] virtues to act with propriety, but in which the greatest applause is to be acquired by those who can acquit themselves with honour. With what impatience does the man of spirit and ambition, who is depressed by his situation, look round for some great opportunity to distinguish himself ? No circumstances, which can afford this, appear to him undesirable. He even looks forward with satisfaction to the prospect of foreign war, or civil dissension; and, with secret transport and delight, sees through all the confusion and bloodshed which attend them, the probability of those wished-for occasions presenting themselves, in which he may draw upon himself the attention and admiration of mankind. The man of rank and distinction, on the contrary, whose whole glory consists in the propriety of his ordinary behaviour, who is contented with the humble renown which this can afford him, and has no talents to acquire any other, is unwilling to embarrass himself with what can be attended either with difficulty or distress. To figure at a ball is his great triumph, and to succeed in an intrigue [I-136] of gallantry, his highest exploit. He has an aversion to all public confusions, not from the love of mankind, for the great never look upon their inferiors as their fellow-creatures ; nor yet from want of courage, for in that he is seldom defective ; but from a consciousness that he possesses none of the virtues which are required in such situations, and that the public attention will certainly be drawn away from him by others. He may be willing to expose himself to some little danger, and to make a campaign when it happens to be the fashion. But he shudders with horror at the thought of any situation which demands the continual and long exertion of patience, industry, fortitude, and application of thought. These virtues are hardly ever to be met with in men who are born to those high stations. In all governments accordingly, even in monarchies, the highest offices are generally possessed, and the whole detail of the administration conducted, by men who were educated in the middle and inferior ranks of life, who have been carried forward by their own industry and [I-137] abilities, though loaded with the jealousy, and opposed by the resentment, of all those who were born their superiors, and to whom the great, after having regarded them first with contempt, and afterwards with envy, are at last contented to truckle with the same abject meanness with which they desire that the rest of mankind should behave to themselves.

The Problem of Corruption

Traditionally “corruption” was seen to be a degeneration from a higher or healthier state to a lower or unhealthier state; and that this degeneration was the result of there being too much wealth or “luxury” which led to the weakening of the moral fibre of the individual.[15] As an advocate of free markets and the division of labour in a commercial or industrial society AS rejected this view and located the source of corruption elsewhere. Rather, it was the result of two factors:

  1. people seeking favors, privileges, indemnities from the state at the expense of other citizens (taxpayers, consumers). This could take the form of government jobs (preferments, sinecures, grants), state funding or subsidies, laws preventing competition, or having a direct way of influencing government policies (being able to vote or be elected to Parliament, or sitting on committees of boards which advised government)
  2. people trying to avoid the consequences of bad or oppressive laws. This could take the form of smuggling to evade prohibitions or trade restrictions and tariffs, bribing judges to get legal proceedings underway in a timely manner, or to get a favored outcome in a case; or bribing army officers to escape impressment into the navy or conscription into the army.

Thus for AS corruption was the product of a government that had too much power over its citizens, that spent too much money or was wasteful, that taxed its people excessively, that employed venal people who used their office to benefit themselves at public expense, and that was the locus for competing factions, parties, and other vested interests who sought favors and benefits.

The corruption consisted in people breaking “unjust” laws and having public support for doing so, seeking and getting preferred tax and regulation treatment by the government, the existence of sinecures which were sold to the highest bidder or transferred to one’s son, the influencing of Parliament by private vested interests (often behind closed doors), the provision of jobs and payments to favourites of the court, judicial bribery to overcome delays in hearing a case or seeking the favorable outcome of a case, and so on.

Not surprisingly given the economic nature of corruption, AS provides several examples in WN. On smuggling to escape onerous taxes or trade prohibitions:

[WN II-520-21 online]: THIRDLY, the hope of evading such taxes by smuggling gives frequent occasion to forfeitures and other penalties, which entirely ruin the smuggler; a person who, though no doubt highly blameable for violating the laws of his country, is frequently incapable of violating those of natural justice, and would have been, in every respect, an excellent citizen, had not the laws of his country made that a crime which nature never meant to be so. In those corrupted governments where there is at least a general suspicion of much unnecessary expence, and great misapplication of the public revenue, the laws which guard it are little respected. Not many people are scrupulous about smuggling when, without perjury, they can find any easy and safe opportunity of doing so. To pretend to have any scruple about buying smuggled goods, though a manifest encouragement to the violation of the revenue laws, and to the perjury which almost always attends it, would in most countries be regarded as one of those pedantic pieces of hypocrisy which, instead of gaining credit with any body, serve only to expose the person who affects to practise them, to the suspicion of being a greater knave than most of his neighbours. By this indulgence of the public, the smuggler is often encouraged to continue a trade which he is thus taught to consider as in some measure innocent; and when the severity of the revenue laws is ready to fall upon him, he is frequently disposed to defend with violence, what he has been accustomed to regard as his just property. From being at first, perhaps, rather imprudent than criminal, he at last too often becomes, one of the hardiest and most determined violaters of the laws of society. By the ruin of the smuggler, [II-521] his capital, which had before been employed in maintaining productive labour, is absorbed either in the revenue of the state or in that of the revenue-officer, and is employed in maintaining unproductive, to the diminution of the general capital of the society, and of the useful industry which it might otherwise have maintained.

Here is an interesting comparison of granting sinecures to army officers and favored manufacturers having the ability to “intimidate the legislature” into passing legislation which favors them:

[WN II-54-55 online]: To expect, indeed, that the freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceana or Utopea should ever be established in it. Not only the prejudices of the publick, but what is much more unconquerable, the private interests of many individuals irresistably oppose it. Were the [II-55] officers of the army to oppose with the same zeal and unanimity any reduction in the number of forces, with which master manufacturers set themselves against every law that is likely to increase the number of their rivals in the home market, were the former to animate their soldiers in the same manner as the latter enflame their workmen to attack with violence and outrage the proposers of any such regulation, to attempt to reduce the army would be as dangerous as it has now become to attempt to diminish in any respect the monopoly which our manufacturers have obtained against us. This monopoly has so much increased the number of some particular tribes of them, that, like an overgrown standing army, they have become formidable to the government, and upon many occasions intimidate the legislature. The member of parliament who supports every proposal for strongthening this monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest publick services can protect him from the most infamous abuse and detraction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists.

Here is a similar discussion of the favorable treatment given to companies in the “colony trade” who are “the principal advisers” to government of the regulations which govern their business. There is also a very similar passage concerning woollen manufacturers in WN [WN IV.viii.17; II-494].

[WN II-182-83 online]: OF the greater part of the regulations concerning the colony trade, the merchants who carry it on, it must be observed, have been the principal advisers. We must not wonder, therefore, if in the greater part of them, their interest has been more considered than either that of the colonies or that of the mother country. In their exclusive privilege of supplying the colonies with all the goods which they wanted from Europe, and of purchasing all such parts of their surplus produce as could not interfere with any of the trades which they themselves carried on at home, the interest of the colonies was sacrificed to the interest of those merchants. In allowing the same drawbacks upon the re-exportation of the greater part of European and East India goods to the colonies, as upon their re-exportation to any independent country, the interest of the mother country was sacrificed to it, even according to the mercantile ideas of that interest. It was for the interest of the merchants to pay as little as possible, for the foreign goods which they sent to the colonies, and, consequently, to get back as much as possible of the duties which they advanced upon their importation into Great Britain. They might thereby be enabled to sell in the colonies, either the same quantity of goods with a greater profit, or a greater quantity with the same profit, and, consequently, to gain something either in the one way or the other. It was, likewise, for the interest of the colonies to get all such goods as cheap and in as great abundance as possible. But this might not always be for the interest of the mother country. She might frequently suffer both in her revenue, by giving back a great part of the duties which had been paid upon the importation of such goods; and in her manufactures, by being undersold in the colony market, in consequence of the easy terms upon which foreign manufactures could be carried thither by means of those drawbacks. The progress of the linen [II-183] manufacture of Great Britain, it is commonly said, has been a good deal retarded by the drawbacks upon the re-exportation of German linen to the American colonies.

On how the King is able to grant favors and give jobs to his “favourites” we see in LJ that:

[LJ[A] V.15: 275]: The frequency of the elections is also a great security for the liberty of the people, as the representative must be carefull to serve his country, at least his constituents, otherwise he will be in danger of | [9] losing his place at the next elections. In an absolute government favours are bestowed and all publick offices conferred on the favourites of the king. But in a country like this publick favours are generally bestowed on the active, bustling, important men; such are most bold to demand any favour for their constituents, and are in this manner naturally more distinguished than the others; and it is not a bad way that power should be conferred on those who have naturally the greatest influence. The more frequent these elections are, the more dependent are the representatives.

The widespread corruption in the judiciary came about AS thought because the King got a share of the fees of court and had no incentive to reduce his income from that source, and because the judges were given a largely free hand in setting them and receiving them with little or no administrative oversight. AS thought he could eliminate bribery and corruption in the courts by changing the incentives. Following this long passage is another long but important passage in which AS discusses his interest in “competing courts” which tried to attract business to their courts by inventing “legal fictions” to show their particular court was competent to try certain cases, and by providing cheap and efficient legal and judicial services. This passage was to influence Gustave de Molinari’s thinking on a fully private and competitive court system in his book Les Soirées de la rue Saint-Lazare (1849).[16]

[WN II-325-26 online]: THE whole expence of justice too might easily be defrayed by the fees of court; and, without exposing the administration of justice [II-325] to any real hazard of corruption, the public revenue might thus be entirely discharged from a certain, though, perhaps, but a small incumbrance. It is difficult to regulate the fees of court effectually, where a person so powerful as the sovereign is to share in them, and to derive any considerable part of his revenue from them. It is very easy, where the judge is the principal person who can reap any benefit from them. The law can very easily oblige the judge to respect the regulation, though it might not always be able to make the sovereign respect it. Where the fees of court are precisely regulated and ascertained, where they are paid all at once, at a certain period of every process, into the hands of a cashier or receiver, to be by him distributed in certain known proportions among the different judges after the process is decided, and not till it is decided, there seems to be no more danger of corruption than where such fees are prohibited altogether. Those fees, without occasioning any considerable increase in the expence of a law-suit, might be rendered fully sufficient for defraying the whole expence of justice. By not being paid to the judges till the process was determined, they might be some incitement to the diligence of the court in examining and deciding it. In courts which consisted of a considerable number of judges, by proportioning the share of each judge to the number of hours and days which he had employed in examining the process, either in the court or in a committee by order of the court, those fees might give some encouragement to the diligence of each particular judge. Public services are never better performed than when their reward comes only in consequence of their being performed, and is proportioned to the diligence employed in performing them. In the different parliaments of France, the fees of court (called Epices and vacations) constitute the far greater part of the emoluments of the judges. After all deductions are made, the neat salary paid by the crown to a counsellor or judge in the parliament of Toulouse, in rank and dignity the [II-326] second parliament of the kingdom, amounts only to a hundred and fifty livres, about six pounds eleven shillings sterling a year. About seven years ago that sum was in the same place the ordinary yearly wages of a common footman. The distribution of those Epices too is according to the diligence of the judges. A diligent judge gains a comfortable, though moderate revenue by his office: An idle one gets little more than his salary. Those parliaments are perhaps, in many respects, not very convenient courts of justice; but they have never been accused; they seem never even to have been suspected of corruption.

And the following paragraph:

[WN II326-27 online]: THE fees of court seem originally to have been the principal support of the different courts of justice in England. Each court endeavoured to draw to itself as much business as it could, and was, upon that account, willing to take cognizance of many suits which were not originally intended to fall under its jurisdiction. The court of king's bench, instituted for the trial of criminal causes only, took cognizance of civil suits; the plaintiff pretending that the defendant, in not doing him justice, had been guilty of some trespass or misdemeanor. The court of exchequer, instituted for the levying of the king's revenue, and for enforcing the payment of such debts only as were due to the king, took cognizance of all other contract debts; the plaintiff alledging that he could not pay the king, because the defendant would not pay him. In consequence of such fictions it came, in many cases, to depend altogether upon the parties before what court they would chuse to have their cause tried; and each court endeavoured, by superior dispatch and impartiality, to draw to itself as many causes as it could. The present admirable constitution of the courts of justice in England was, perhaps, originally in a great measure formed by this emulation which antiently took place between their respective judges; each judge endeavouring to give, in his own court, the speediest and most [II-327] effectual remedy, which the law would admit, for every sort of injustice. Originally the courts of law gave damages only for breach of contract. The court of chancery, as a court of conscience, first took upon it to enforce the specific performance of agreements. When the breach of contract consisted in the nonpayment of money, the damage sustained could be compensated in no other way than by ordering payment, which was equivalent to a specific performance of the agreement. In such cases, therefore, the remedy of the courts of law was sufficient. It was not so in others. When the tenant sued his lord for having unjustly outed him of his lease, the damages which he recovered were by no means equivalent to the possession of the land. Such causes, therefore, for some time, went all to the court of chancery, to the no small loss of the courts of law. It was to draw back such causes to themselves that the courts of law are said to have invented the artificial and fictitious writ of ejectment, the most effectual remedy for an unjust outer or dispossession of land.

Cabals and Conspiracies against the Public

Conspiracies

In Wealth of Nations AS famously argued that manufacturers and merchants would often get together to talk about “a conspiracy against the public” in order to restrict trade to their own advantage.

[WN vol. 1, I.x.c.27, p. 145; online]: People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

In my view, any gathering of individuals who share a common purpose, who meet together to discuss their interests, and to take action to pursue those interests is technically also a “conspiracy.” Thus, the same thing could be said about people with shared interests and common purposes who are members of a faction, party, or cabal. They too “seldom meet but to conspire against the public.” However, AS limited his use of the term “conspiracy” to gatherings of “people of the same trade”.

This discussion occurs in WN where AS is clearly aware of how the self-interested behaviour of business groups encouraged them to form associations to pursue that self-interest at the expence of ordinary consumers and taxpayers by lobbying for privileges from the government in the form of monopolies, subsidies, and tariff protection. They conspire among themselves to get the state to use its coercive powers to further their own interests at the expense of others - what he calls elsewhere the “corporation spirit” which is a holdover from the practices of medieval towns. He makes this explicit in a discussion of business and merchants who can conspire to achieve this purpose, in fact he asserts that it is inevitable:

[WN I-160-61 online]: People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

The famous passage quoted above continues with a discussion of how it is government regulations which encourage people of “the same trade” to meet and discuss their interests in the first place. These are regulations which require members of the same trade to enter their names and addresses in a “publick register”, and to “tax themselves” as a way of providing welfare to the poor, sick, widows, and orphans. Thus they initially meet to satisfy government regulations but their conversation will inevitably turn to “conspiratorial” matters like increasing prices and restricting competition. It continues:

[WN I-161]: A REGULATION which enables those of the same trade to tax themselves in order to provide for their poor, their sick, their widows and orphans, by giving them a common interest to manage, renders such assemblies necessary.

AN incorporation not only renders them necessary, but makes the act of the majority binding upon the whole. …

In addition to the merchants, AS believes that “the wretched spirit of monopoly” also applies to “country gentlemen and farmers” although to begin with AS believes they were less rapacious than their manufacturing and merchant brethren. However, perhaps as a defensive move, they copied the merchants and sought monopoly for themselves as well. AS notes that their opportunities to “conspire against the public” is more limited than the merchants. The latter are concentrated in towns and have more opportunities to meet together, whereas the former are geographical dispersed across the country:

[WN II-42-43 online]: COUNTRY gentlemen and farmers are, to their great honour, of all people, the least subject to the wretched spirit of monopoly. The undertaker of a great manufactory is sometimes alarmed if another work of the same kind is established within twenty miles of him. The Dutch undertaker of the woollen manufacture at Abbeville, stipulated that no work of the same kind should be established within thirty leagues of that city. Farmers and country [II-43] gentlemen, on the contrary, are generally disposed rather to promote than to obstruct the cultivation and improvement of their neighbours farms and estates. They have no secrets, such as those of the greater part of manufacturers, but are generally rather fond of communicating to their neighbours, and of extending as far as possible any new practice which they have found to be advantageous. Pius Questus, says old Cato, stabilissimusque, minimeque invidiosus; minimeque male cogitantes sunt, qui in eo studio occupati sunt. Country gentlemen and farmers, dispersed in different parts of the country, cannot so easily combine as merchants and manufacturers, who, being collected into towns, and accustomed to that exclusive corporation spirit which prevails in them, naturally endeavour to obtain against all their countrymen the same exclusive privilege which they generally possess against the inhabitants of their respective towns. They accordingly seem to have been the original inventors of those restraints upon the importation of foreign goods which secure to them the monopoly of the home-market. It was probably in imitation of them, and to put themselves upon a level with those who, they found, were disposed to oppress them, that the country gentlemen and farmers of Great Britain in so far forgot the generosity which is natural to their station as to demand the exclusive privilege of supplying their countrymen with corn and butcher’s-meat. They did not perhaps take time to consider how much less their interest could be affected by the freedom of trade than that of the people whose example they followed.

AS’s prognosis for a society which allowed conspiracies of merchants to successfully control government trade policy was very dire. In a discussion of Danish colonies in the Caribbean, he goes so far as to call a government of and by merchants “the worst of all governments”:

[WN II-164 online] : The small islands of St. Thomas and Santa Cruz are the only countries in the new world that have ever been possessed by the Danes. These little settlements too were under the government of an exclusive company, which had the sole right, both of purchasing the surplus produce of the colonists, and of supplying them with such goods of other countries as they wanted, and which, therefore, both in its purchases and sales, had not only the power of oppressing them, but the greatest temptation to do so. The government of an exclusive company of merchants, is, perhaps, the worst of all governments for any country whatever. It was not, however, able to stop altogether the progress of these colonies, though it rendered it more slow and languid. The late king of Denmark dissolved this company, and since that time the prosperity of these colonies has been very great.

And again here, where he admits that although “the violence and injustice of the rulers of mankind is an ancient evil" for which there is scarcely any remedy to be found, “the mean rapacity, the monopolizing spirit of merchants and manufacturers” disqualifies them from ever being “the rulers of mankind”:

[ WN, IV. iii. c. 9; II-82-83 online]: BY such maxims as these, however, nations have been taught that their interest consisted in beggaring all their neighbours. Each nation has been made to look with an invidious eye upon the prosperity of all the nations with which it trades, and to consider their gain as its own loss. Commerce, which ought naturally to be, among nations, as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity. The capricious ambition of kings and ministers has not, during the present and the preceeding century, been more fatal to the repose of Europe than the impertinent jealousy of merchants and manufacturers. The violence and injustice of the rulers of mankind is an ancient evil, for which, I am afraid the nature of human affairs can scarce admit of a remedy. But the mean rapacity, the monopolizing spirit of merchants and manufacturers, [II-83] who neither are, nor ought to be the rulers of mankind, though it cannot perhaps be corrected, may very easily be prevented from disturbing the tranquillity of any body but themselves.

However, for some reason AS did not apply the same argument to gatherings or meetings of politicians, “statesmen,” and government bureaucrats who might just as readily and willingly “conspire” together to increase taxes and the power of the state. In the case of a free market the self-interest of producers and merchants was channelled into serving the needs of consumers, by the “invisible hand” [WN, vol. 1, IV.ii.9, p. 456], so long as the government did not grant privileges to some producers. However, there was no similar mechanism to direct the self-interest of politicians or statesmen into a safe direction, no “visible hand” (to paraphrase Smith) of “the great Conductor” of an army or an Empire like Marcus Aurelius to maintain the harmony of the political order [TMS VI.ii.4, p. 236; VII.ii.1.37, p. 289]; no “impartial spectator” who would council politicians and bureaucrats not to do this. Perhaps this omission was because he seemed to give most politicians the benefit of the doubt and thought they could put aside their personal self-interest or class interest for the sake of the general public interest.

Since AS did not do this, I have done it for him:

People in government, the church, and the military seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the publick, or in some contrivance to raise taxes, censor heretics, or increase spending. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people in government, the church, and the military from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

Cabals

In addition to the word “conspiracy” AS also used the more derogatory term “cabal” (10 instances in TMS).

For example in a passage we have already quoted, “the ambitious man” who wants to be a “candidate for the highest stations” will often be prepared to lie, cheat, and murder in order to achieve his ends, and will resort to “the vulgar arts of intrigue and cabal” to do this:

[TMS I-155-56 online]: To attain to this envied situation, the candidates for fortune too frequently abandon the paths of virtue … In many governments the candidates for the highest stations are above the law; and, if they can attain the object of their ambition, they have no fear of being called to account for the means by which they acquired it. They often endeavour, therefore, not only by fraud and falsehood, the ordinary and vulgar arts of intrigue and cabal; but sometimes by the perpetration of the most enormous crimes, by murder and assassination, by rebellion and civil war, to supplant and destroy those who oppose or stand in the way of their greatness.

Another example concerns the bribing of “all the judges” in order to acquire a desirable outcome in a law suit. Such a person is described by AS as “desirous either of obtaining the favourable, or of avoiding the unfavourable opinion, by intrigue and cabal.” [TMS I-315-16 online] .

There is also a passing reference to how “Faction, intrigue, and cabal, disturb the quiet of the unfortunate statesman.“ [TMS I-373 online]

Other groups who resort to forming cabals to achieve their ends are religious groups. AS denounces the corruption which these introduce into politics: “the natural principles of religion are … corrupted by the factious and party zeal of some worthless cabal” [TMS I-147 online]

There are several references to cabals which form in the literary world in order to promote the work and reputation of authors, and which on the surface appear not to be politically motivated. It seems AS thinks that “mathematicians and natural philosophers” (perhaps like him) are less likely to form cabals in order to promote their own work and denigrate the work of their rivals. This is not the case he thinks for poets who are more than willing to form “literary factions: and “literary cabals” to serve their own interests. A political aspect does appear in the formation of these types of cabals as the members of the cabal are often trying to get paid positions or appointments to government funded Scientific and Literary Academies:

[TMS I-313-14 online]: Mathematicians and natural philosophers, from their independency upon the public opinion, have little temptation to form themselves into factions and cabals, either for the support of their own reputation, or for the depression of that of their rivals. They are almost always men of the most amiable simplicity of manners, who live in good harmony with one another, are the friends of one another's reputation, enter into no intrigue in order to secure the public applause, but are pleased when their works are approved of, without being either much vexed or very angry when they are neglected.

It is not always the same case with poets, or with those who value themselves upon [I-314] what is called fine writing. They are very apt to divide themselves into a sort of literary factions; each cabal being often avowedly, and almost always secretly, the mortal enemy of the reputation of every other, and employing all the mean arts of intrigue and solicitation to preoccupy the public opinion in favour of the works of its own members, and against those of its enemies and rivals. In France, Despreaux and Racine did not think it below them to set themselves at the head of a literary cabal, in order to depress the reputation, first of Quinault and Perreault, and afterwards of Fontenelle and La Motte, and even to treat the good La Fontaine with a species of most disrespectful kindness. In England, the amiable Mr. Addison did not think it unworthy of his gentle and modest character to set himself at the head of a little cabal of the same kind, in order to keep down the rising reputation of Mr. Pope. Mr. Fontenelle, in writing the lives and characters of the members of the academy of sciences, a society of mathematicians and natural philosophers, has frequent opportunities of [I-314] celebrating the amiable simplicity of their manners ; a quality which, he observes, was so universal among them as to be characteristical, rather of that whole class of men of letters, than of any individual. Mr. D'Alembert, in writing the lives and characters of the members of the French academy, a society of poets and fine writers, or of those who are supposed to be such, seems not to have had such frequent opportunities of making any remark of this kind, and nowhere pretends to represent this amiable quality as characteristical of that class men of letters whom he celebrates.

The attitude of “the Prudent Man” to faction and cabal

On the other hand, AS believes that “the prudent man” who has some talent and skill in his profession would refuse to join one of “those little clubs and cabals” to promote himself, unless he did so “in self-defense” on behalf of the public which is prey to the activities of the cabal:

[TMS II-54-54 online] :The prudent man always studies seriously and earnestly to understand whatever he professes to understand, and not merely to persuade other people that he understands it; and though his talents may not always be very brilliant, they are always perfectly genuine. He neither endeavours to impose upon you by the cunning devices of an artful impostor, nor by the arrogant airs of an assuming pedant, nor by the confident assertions of a superficial and [II-54] impudent pretender. He is not ostentatious even of the abilities which he really possesses. His conversation is simple and modest, and he is averse to all the quackish arts by which other people so frequently thrust themselves into public notice and reputation. For reputation in his profession he is naturally disposed to rely a good deal upon the solidity of his knowledge and abilities; and he does not always think of cultivating the favour of those little clubs and cabals, who, in the superior arts and sciences, so often erect themselves into the supreme judges of merit; and who make it their business to celebrate the talents and virtues of one another, and to decry whatever can come into competition with them, If he ever connects himself with any society of this kind, it is merely in self-defence, not with a view to impose upon the public, but to hinder the public from being imposed upon, to his disadvantage, by the clamours, the whispers, or the intrigues, either of that particular society, or of some other of the same kind.

In addition AS thinks that “the prudent man” will not “cabal” (used a s a verb not a noun in this case) in order to “force himself” into a government position but will “confine himself … to his own affairs.” [Also see this quotation at the beginning of this essay.]

[TMS II-59-60 online]: The prudent man is not willing to subject himself to any responsibility which his duty does not impose upon him. He is not a bustler in business where he has no concern ; is not a meddler in other people's affairs ; is not a professed counsellor or adviser, who obtrudes his advice where nobody is asking it. He confines himself, as much as his duty will permit, to his own affairs, and has no taste for that foolish [II-60] importance which many people wish to derive from appearing to have some influence in the management of those of other people. He is averse to enter into any party disputes, hates faction, and is not always very forward to listen to the voice even of noble and great ambition. When distinctly called upon, he will not decline the service of his country, but he will not cabal in order to force himself into it, and would be much better pleased that the public business were well managed by some other person, than that he himself should have the trouble, and incur the responsibility, of managing it. In the bottom of his heart he would prefer the undisturbed enjoyment of secure tranquillity, not only to all the vain splendour of successful ambition, but to the real and solid glory of performing the greatest and most magnanimous actions.

The Class of “Unproductive Hands” who live off other men’s labour

Smith believed that there were two different kinds of labour, “productive” and “unproductive,” and that there were sizable groups of “unproductive hands” who lived off the productive public’s taxes and sometimes engaged in “publick prodigality and misconduct” [WN, vol I, II.iii.30, p. 342; online].

Most of the time he thought the pursuit of selfish interests (when not associated with political power but was conducted within the confines of the free market and the rule of law which protected property rights) improved the well-being and wealth not only of the individual merchant but also society in general. He went as far as saying in LJ(A) that “opulence and freedom (were) the two greatest blessings men can possess.” [LJ (A), iii. 111-12: 185; Wed 16 Feb. 1763] This is the point of his invisible hand quotation quoted above. With this distinction between the harmony and productivity of the free market and the unjust and unproductive activities of those who benefit from state privileges clearly understood, Smith is also aware that any group or individual, whether the poor, princes, the military, and even merchants, can conspire among themselves and seek the power of the state to further their own interests at the expense of others, what he calls elsewhere the “corporation spirit”. He makes this explicit in a discussion of business and merchants who can conspire to achieve this purpose and country gentlemen and farmers (also quoted above).

Smith was aware that the rise of the merchant class in his own time posed a serious risk to liberty if they were able to seize control of the state (to “tyrannize” or “intimidate” it to do their bidding) and use it for their own purposes - which he thought they had been able to do successfully under the mercantilist system. The model they had before them was the restrictive and exploitative behaviour of the traditional wielders of power and privilege in the state, namely the monarch’s court, the aristocracy, the army, and the established church whose expenses were itemized in the Civil List, which will be discussed below. It was these traditional groups which constituted an “unproductive class” along with the new class of mercantilist merchants and manufacturers, which were able to use the state to siphon wealth from the labour of other productive men and impoverish the nation.

However, it should be noted that while the “protected” merchants and manufacturers were “productive” in one sense, since they produced and sold things to consumers in the market, they were at the same time “unproductive” in another sense. What I mean by this is that their ability to get the state to limit or prevent others from producing and selling certain goods ands services meant that other people were less productive than they might have been in the absence of such restriction and prohibitions. It also meant that the consumers who were forced to buy the goods produced by the privileged manufacturers and prevented from buying better or cheaper goods from elsewhere mean that they were less wealthy than they would have been in the absence of these regulations and controls. Not to mention having their rights to property and liberty violated. So in conclusion I would argue that the mercantilist system while it may have stimulated production in some areas and created wealth for some producers the net result was that production overall was hampered and reduced and distorted from its “natural course”, and some individuals (whether consumers or producers) were made worse off than they might have been in a “system of natural liberty.”.

In this passage from WN AS talks about the true cost of these “unproductive hands” in the pre-mercantilist regime which included “the people who compose a numerous and splendid court, a great ecclesiastical establishment, great fleets and armies”:

[WN I-416 online]: GREAT nations are never impoverished by private, though they sometimes are by publick prodigality and misconduct. The whole, or almost the whole publick revenue, is in most countries employed in maintaining unproductive hands. Such are the people who compose a numerous and splendid court, a great ecclesiastical establishment, great fleets and armies, who in time of peace produce nothing, and in time of war acquire nothing which can compensate the expence of maintaining them, even while the war lasts. Such people, as they themselves produce nothing, are all maintained by the produce of other men's labour. When multiplied, therefore, to an unnecessary number, they may in a particular year consume so great a share of this produce, as not to leave a sufficiency for maintaining the productive labourers, who should reproduce it next year. The next year's produce, therefore, will be less than that of the foregoing, and if the same disorder should continue, that of the third year will be still less than that of the second. Those unproductive hands, who should be maintained by a part only of the spare revenue of the people, may consume so great a share of their whole revenue, and thereby oblige so great a number to encroach upon their capitals, upon the funds destined for the maintenance of productive labour, that all the frugality and good conduct of individuals may not be able to compensate the waste and degradation of produce occasioned by this violent and forced encroachment.

AS goes into more detail in his discussion of the Civil List, which was the official list of individuals and groups who received official grants of tax money from the crown, in LJ(B) (1763), 174. The whole very long paragraph is interesting because he grapples with the idea of the national debt and interest payments as well as raising tax revenue. It shows how other powerful and wealthy individuals could become essential to maintaining the power of the king and how their wealth created independent centres of power which were able to resist the king in a complex to-ing and fro-ing of powerful elites:

[LJ(B) Tues. 8 March 1763 [174]] The Civill List amounts in this reign to 800,000; in the last reign it was somewhat more; and in the preceding reign it amountd to about 700, which was somewhat greater than that in the two reigns preceding it. This summ is set appart for maintaing the kings household and supporting the dignity of the crown, but might in the hands of more vigorous or ambitious princes give the king more authority than the constitution of the kingdom designed he should have. The other part which arises from the great taxes laid on the subjects, viz that on malt and that on land, which varies from 2 to four shillings | in the pound. These amount ordinarilly to something above 300,000£. They are set appart for maintaining the marine and land forces, the fleet and army, for which they generally suffice in time of peace, extraordinary supplies being granted in the time of war. The 3d. part of the revenue is the funds mortgaged to pay the debts contracted in the present reigns. The creditors requird some security for this money. For this purpose fixed taxes have been introduced, and the revenue arising from them mortgaged for their payment. With <?this> the king can not meddle. It is paid into the offices of the exchequer where it is perfectly secure. The auditor and other officers of the exchequer are accountable for it to Parliament and must give in their discharges to it, none of which will be received except they be from the publick creditors appointed by Parliament. This part of the revenue can therefore give him no authority but as it gives him the disposall of some very profitable places. It strengthens also his interest against that of the Stuart family as these | creditors would, on their introduction, be cut out of both principall and interest. It is levied indeed by his officers but never comes into his hands, but goes (as I said <)> first to the exchequer and then to the creditors. There is generally a surplus in these taxes above what is necessary to pay the creditors interest to whom it is appropriated. This goes, being unnapropriated, into what is called the unappropriated or sinking fund; this the king can never come at. It is under the immediate direction and care of the auditors and other officers of the exchequer, who, as they are officers for life with very high salaries and are generally the first men in the kingdom, will not risque for any consideration the loosing of those offices by granting the use of it for other purposes than those to which it has been alotted. The Civill List is established indeed at the beginning of every reign, but gives in the present management no authority, as it is all expended on the luxury and magnificence of the court and the household of the king. | The other part which is revenue, viz that raised from land, excise, and customs, is alotted for the fleets and the army and is granted from year to year. The mortgaged taxes are necessarily perpetuall; the Civill List for the life of the king; and the other part is occasionall, which would therefore fall if the Parliament was not called. The funds for the support of the armies and fleets also depends on the grant of the Parliament; so that the whole of the government must be at an end if the Parliament was not regularly called. So far is the king from being able to govern the kingdom without the assistance of Parliament for 15 or 16 years, as Chas. 1st did, that he could not without giving offence to the whole nation by a step which would shock every one, maintain the government for one year without them, as he has no power of levying supplies. In this manner a system of | liberty has been established in England before the standing army was introduced; which as it was not the case in other countries, so it has not been ever establishd in them. The standing armies in use in those countries put it into the power of the king to over rule the Senate, Diet, or other supreme or highest court of the nation.—The supreme power in legislation is here divided betwixt the king, Lords, and Commons. A law may begin in either House and be passed by the other. The king can’t however interfere after the debate is begun and tell them that he dissaproves of such or such a debate, tho he may recommend one to their consideration before it has been consider’d. Money bills however can not begin anywhere but from the Commons. The Lords indeed have disputed this priviledge, but we see it has been possessed by the Commons for above 100 years. The Lords can only either assent to it simpliciter or refuse it simpliciter, but can not alter or add to it in any shape. The king has in all cases the power only of putting his assent or negative | to a bill, and the denying any bill that has passed both Houses, being altogether unpopular, has gone into dissuse. The king has always given his assent to every bill since Wm. 3ds time. Charles 2d was so sensible of it being altogether disagreable to the people that he never attempted it, tho he often used methods very low and mean, as the staling of a bill, etc.; the umbrage this would give, he thought, was less than that of plainly refusing it. The Civill List and the standing army are the only things which can any way endanger the liberty of the subjects. The Civill List is so considerable that in the hands of designing, vigorous, and ambitious princes it might give them an influence far superior to that which the dependance of a few officers about the palace can bestow. But customs of this sort are very difficulty changed by any prince.—The standing army might also without doubt be turned against the nation if the king had attained great influence with it. But there is one security here also. Many of the persons of chief rank and station in the army have also large estates of their own and are members of the House of Commons. They have in this manner an influence and power altogether independent of the king. It would never be their interest to join with the king in any design to inslave the nation, as no consideration he could bestow on them will be able to turn their interest to his side. So that however mercenary we should suppose them, those at least may be depended on who have a seat in the Parliament or offices depending on it.

Smith thought that “such people” (i.e. the Court, the established Church, and the army and navy) “themselves produce nothing, are all maintained by the produce of other men’s labour” and that their ever growing cost was a “violent and forced encroachment” on society’s accumulated capital. Smith optimistically believed that, in spite of this enormous cost and waste, the “frugality and good conduct” of individuals in the productive part of the market had proven to be, and probably would continue to be, enough to cover the cost of this waste, as he says in the following paragraph :

[WN I-416-17 online]: THIS frugality and good conduct, however, is upon most occasions, it appears from experience, sufficient to compensate, not only the private prodigality and misconduct of individuals, but the publick extravagance of government. The uniform, constant, [I-417] and uninterrupted effort of every man to better his condition, the principle from which publick and national, as well as private opulence is originally derived, is frequently powerful enough to maintain the natural progress of things towards improvement, in spite both of the extravagance of government, and of the greatest errors of administration. Like the unknown principle of animal life, it frequently restores health and vigour to the constitution, in spite, not only of the disease, but of the absurd prescriptions of the doctor.

However, AS is not always clear sighted when it comes to the concept of “unproductive labour”. For example he lumps into this category “slothful landlords” who, he argues, live off the productive labour of their peasants. A classical liberal would not find this objectionable if the landlord had justly acquired their landed property and were freely renting it out to tenants. The classical liberal would however find this objectionable if the “slothful landlord” had acquired his land through military conquest, a state land grant, or some other unjust means. Smith unfortunately mixes the two kinds of property ownership together and thus clouds the issue. Nevertheless, there are some interesting insights to be gleaned from this passage:

[Earl Draft WN, 3-4]: It cannot be very difficult to explain how it comes about that the rich and the powerful should, in a civilized society, be better provided with the conveniencies and necessaries of life than it is possible for any person to provide himself in a savage and solitary state. It is very easy to conceive that the person who can at all times direct the labours of thousands to his own purposes, should be better provided with whatever he has occasion for than he who depends upon his own industry only. But how it comes about that the labourer and the peasant should likewise be better provided is not perhaps so easily understood. In a civilized society the poor provide both for themselves and for the enormous luxury of their superiors. The rent which goes to support the vanity of the slothful landlord is all earned by the industry of the peasant. The monied man indulges himself in every sort of ignoble and sordid sensuality, at the expence of the merchant and the trades man to whom he lends out his stock at interest. All the indolent and frivolous retainers upon a court are, in the same manner, fed, cloathed, and lodged by the labour of those who pay the taxes which support them. Among savages, on the contrary, every individual enjoys the whole produce of his own industry. There are among them no landlords, no usurers, no taxgatherers. We might naturally expect, therefore, if experience did not demonstrate the contrary, that every individual among them should have a much greater affluence of the necessaries and conveniencies of life than can be possessed by the inferior ranks of people in a civilized society.

Smith shows the same confusion in the following passage from an early draft of WN where he plays a thought experiment concerning the equal division of property in a society and ponders about those who work and do not work. What is intriguing is his reference to “violence” and “the orderly oppression of law” to explain why some groups are better off than others:

[Earl Draft WN, 4-5]: What considerably increases this difficulty is the consideration that the labour of an hundred, or of an hundred thousand men, should seem to bear the same proportion to the support of an hundred or of an hundred thousand, which the labour of one bears to the support of one man. Supposing therefore that the produce of the labour of the multitude was to be equally and fairly divided, each individual, we should expect, could be little better provided for than the single person who laboured alone. But with regard to the produce of the labour of a great society there is never any such thing as a fair | and equal division. In a society of an hundred thousand families, there will perhaps be one hundred who don’t labour at all, and who yet, either by violence or by the more orderly oppression of law, employ a greater part of the labour of the society than any other ten thousand in it. The division of what remains, too, after this enormous defalcation, is by no means made in proportion to the labour of each individual. On the contrary those who labour most get least. The opulent merchant, who spends a great part of his time in luxury and entertainments, enjoys a much greater proportion of the profits of his traffic than all the clerks and accountants who do the business. These last, again, enjoying a great deal of leisure and suffering scarce any other hardship besides the confinement of attendance, enjoy a much greater share of the produce than three times an equal number of artizans, who, under their direction, labour much more severely and assiduously. The artizan, again, tho he works generally under cover, protected from the injuries of the weather, at his ease and assisted by the conveniency of innumerable machines, enjoys a much greater share than the poor labourer who has the soil and the seasons to struggle with, and who, while he affords the materials for supplying the luxury of all the other members of the common wealth, and bears, as it were, upon his shoulders the whole fabric of human society, seems himself to be pressed down below ground by the weight, and to be buried out of sight in the lowest foundations of the building. In the midst of so much oppressive inequality, in what manner shall we account for the superior affluence and abundance | commonly possessed even by this lowest and most despised member of civilized society, compared with what the most respected and active savage can attain to.

Thus we can see that Smith is generally of the view that political privileges and the violence associated with them are the cause of much injustice and inequality in society, and thus opposes them. At the same time, he is confused about the nature of what he calls “oppressive inequality”, attributing it sometimes to the result of the unjust use of state power and at other times to the operations of the market itself. The problem was compounded by his inclusion in the “unproductive” group people like the “slothful landlord”, “usurers”, and “the monied man” who “lends out his stock at interest”, groups which later political economists like Jean-Baptiste Say would include in the category of “productive” or “industrious” economic activity.

 

 

V. The Possibilities for Reform↩

Reasons for Adam Smith’s Pessimism about the Possibilities for Reform

Introduction

AS had sound reasons for being pessimistic about the possibilities for reform of society away from the “violence of faction”, the injustice of the “power, privileges, and indemnities” of those of high rank, and the more recent rent-seeking of merchants and manufacturers. It should be remembered that his goal was to help create “the obvious and simple system of natural liberty (which) establishes itself of its own accord” once these impediments and obstacles were removed.

But at a time when “the boisterous and stormy sky of war and faction, of public tumult and confusion” seemed to prevail, there seemed little hope that “the principle of humanity” would get much of hearing:

[TMS I-378 online]: Under the boisterous and stormy sky of war and faction, of public tumult and confusion, the sturdy severity of self-command prospers the most, and can be the most successfully cultivated. But, in such situations, the strongest suggestions of humanity must frequently be stifled or neglected ; and every such neglect necessarily tends to weaken the principle of humanity.

AS believed that there were three very serious impediments to reform which he thought might not be removed, at least in the short to medium term. These were:

  1. “the natural disposition” of people to respect and defer to those of superior rank
  2. “the love of domination and authority” which drives some people to rule a kingdom, to seek high political office, or own slaves
  3. the power and wealth of the existing ruling elites who will not give up their power easily (this includes the old ruling elites with “high rank”, the slave owners in the colonies, and the new mercantilist class)

“The natural disposition” of people to respect and defer to those of superior rank"

In spite of the “power, privileges, and indemnities” enjoyed by the higher ranks of society; the use of state coercion to provide material benefits to privileged groups like merchants, manufacturers, and landowners; and the violation of the natural rights of people to enjoy their own property and the fruits of the own labour, and to enter a trade or profession of their own choice, it did not appear to AS that these measures caused sufficient resentment within the lower orders to expose the superior and privileged orders to any real threat from below.

He thought that “esteem” and “obsequiousness to our superior” and “their habitual state of deference to those whom they have been accustomed to look upon as their natural superiors” was so deeply ingrained in people’s thinking that it seemed to be “a disposition” planted in human beings as part of “the doctrine of Nature”. “The doctrine of reason and philosophy” might tell us otherwise, “that we should oppose them, (but) we can hardly bring ourselves to do it”. He cited the example of the restoration of the monarchy after the English revolution to show how quickly the people forgive and forget the “provocations” and even crimes of their leaders.

[TMS I-227-28 online]: Upon this disposition of mankind, to go along with all the passions of the rich and the powerful, is founded the distinction of ranks, and the order of society. Our obsequiousness to our superiors more frequently arises from our admiration for the advantages of their situation, than from any private expectations of benefit from their good-will. Their benefits can extend but to a few; but their fortunes interest almost every body. We are eager to assist them in completing a system of happiness that approaches so near to perfection; and we desire to serve them for their own sake, without any other recompense but the vanity or the honour of obliging them. Neither is our deference to their inclinations founded chiefly, or altogether, upon a regard to [I-128] the utility of such submission, and to the order of society, which is best supported by it. Even when the order of society seems to require that we should oppose them, we can hardly bring ourselves to do it. That kings are the servants of the people, to be obeyed, resisted, deposed, or punished, as the public conveniency may require, is the doctrine of reason and philosophy; but it is not the doctrine of Nature. Nature would teach us to submit to them for their own sake, to tremble and bow down before their exalted station, to regard their smile as a reward sufficient to compensate any services, and to dread their displeasure, though no other evil were to follow from it, as the severest of all mortifications. To treat them in any respect as men, to reason and dispute with them upon ordinary occasions, requires such resolution, that there are few men whose magnanimity can support them in it, unless they are likewise assisted by familiarity and acquaintance. The strongest motives, the most furious passions, fear, hatred, and resentment, are scarce sufficient to balance this natural [I-129] disposition to respect them; and their conduct must, either justly or unjustly, have excited the highest degree of all those passions, before the bulk of the people can be brought to oppose them with violence, or to desire to see them either punished or deposed. Even when the people have been brought this length, they are apt to relent every moment, and easily relapse into their habitual state of deference to those whom they have been accustomed to look upon as their natural superiors. They cannot stand the mortification of their monarch. Compassion soon takes the place of resentment, they forget all past provocations, their old principles of loyalty revive, and they run to re-establish the ruined authority of their old masters, with the same violence with which they had opposed it. The death of Charles I. brought about the Restoration of the royal family. Compassion for James II. when he was seized by the populace in making his escape on ship-board, had almost prevented the Revolution, and made it go on more heavily than before.

In fact the reverse seemed to be the case. As mentioned above, “the fascination of greatness” of the rich and powerful by people of lower ranks was so strong that they, in AS’s opinion, willingly and perhaps eagerly were deferential to them.

Concerning the role of the “Nature” in implanting this disposition in humans as an act of “the benevolent wisdom of nature”, he states in TMS [also quoted above]:

[TMS II-89-90 online]: This fascination, indeed, is so powerful, that the rich and the great are too often preferred to the wise and the virtuous. Nature has wisely judged that the distinction of ranks, the peace and order of society, would rest more securely upon the plain and palpable difference of birth and fortune, than upon the invisible and often uncertain difference of wisdom and virtue. The undistinguishing eyes of the great mob of mankind can well enough perceive the former: it is with difficulty that the nice discernment of the wise and the virtuous can sometimes distinguish the latter. In the order of all those recommendations, the benevolent wisdom of nature is equally evident.

Again, this seems a strange view for a liberal to hold given the violence and injustice of the system of ranks he has described in such detail in places like TMS.

“The love of domination and authority” which drives some people to rule a kingdom, to seek high political office, or own slaves

This “obsequiousness” and deferential behaviour to one’s ‘superiors” is the driving force from below which keeps the ruling elite in power. It is matched by a similar “natural disposition” from above, in this case a “tyranic disposition”, which drives some people to “dominate” others. Together, the two “natural dispositions” appear to be the keystones which keep the edifice of power in place.

AS is most explicit about this “love of domination” in a couple of passages in LJ(B) in his lecture of Wednesday, 16 February, 1763. The first occurs in a discussion of why it will be so difficult to abolish slavery (discussed further below). Even if slaveowners realized that free wage labor would be more productive and more profitable to their business than slave labour, they will not give up owning slaves for the following reason:

[LJ(B) Wed Feb 16, 1763, pp.113-14] : … and tho as I have here shewn their real interest would lead them to set free their slaves and cultivate their lands by free servants or tenents, yet the love of domination and authority and the pleasure men take in having every thing done by their express orders, rather than to condescend to bargain and treat with those whom they look upon as their inferiors and are inclined to use in a haughty way; this love of domination and tyrannizing, I say, will make it impossible for the slaves in a free country ever to recover their liberty.

He repeated the same claim a bit later in the lecture where he says it is “naturall to mankind”:

[LJ(B) Wed Feb 16, 1763, pp. 129-30] :The love of domination and authority over others, which I am afraid is naturall to mankind, a certain desire of having others below one, and the pleasure it gives one to have some persons whom he can order to do his work rather than be obliged to persuade others to bargain with him, will for ever hinder this from taking place.

And a third example where he talks about "that tyranic disposition which may almost be said to be natural to mankind” and which has been present in all societies:” from their very beginning:

[LJ (B) 134][134] … It is to be observed that slavery takes place in all societies at their begining, and proceeds from that tyranic disposition which may almost be said to be natural to mankind. Whatever form of government was established, it was a part of its constitution that slavery should be continued.

In saying this AS seems to be arguing that, on the one hand there are “natural rights” to life, liberty, and property which drive people to better their condition, to truck and barter with each other, and engage fully in a ”commercial society”. Yet on the other hand, there seems to be a possibly equal “natural disposition” to seek to dominate and enslave others, and those who are dominated and enslave to meekly accept this situation.

Unfortunately AS does not offer any insights into how a liberal reformer might go about changing these beliefs about the love of domination and the disposition to defer to and obey one’s “superiors”. Perhaps he thought that giving lectures on jurisprudence to university students and writing books on moral sentiments and wealth creation would be sufficient in the long term.

The power of custom

“Established and uninterrupted custom” is very hard to break or reform. The question arises then, what should one do when such customs are a violation of the principles of human and natural jurisprudence?

AS has some powerful arguments to make against how “established custom” can “give sanction to a dreadful violation of humanity” and “authorises the widest departure from what is the natural propriety of action”. This is implied in his criticism of the abuse of rank (but not the mere fact that rank exists) by kings, princes, and military commanders, and in the continuing practice of slavery. He suggests that these practices were “originall” with human civilization and possibly “natural” to the human condition because of that. Or that some customs were were good and necessary for the development and preservation of “good morals” and the order and stability of communities.

However, he also realized that some customs are “often much more destructive of good morals, and (are) capable of establishing, as lawful and blameless, particular actions, which shock the plainest principles of right and wrong”. The example of this which brings out one of the angriest condemnations in all of AS’s writing is that of infanticide. He cannot imagine a “greater barbarity” and despairs that if “custom can give sanction to so dreadful a violation of humanity, we may well imagine that there is scarce any particular practice so gross which it cannot authorise.”

The quote is quite long and it shows the depth of AS’s anger against the practice. here I think we hear AS speaking as “the just man” mentioned above:

[TMS II-45-48 online] : It is not therefore in the general style of conduct or behaviour that custom authorises the widest departure from what is the natural propriety of action. With regard to particular usages, its influence is often much more destructive of good morals, and it is capable of establishing, as lawful and blameless, particular actions, which shock the plainest principles of right and wrong.

Can there be greater barbarity, for example, than to hurt an infant? Its helplessness, its innocence, its amiableness, call forth the compassion, even of an enemy, and not to spare that tender age is regarded as the most furious effort of an enraged and cruel conqueror. What then should we imagine must be the heart of a parent who could injure that weakness which even a furious enemy is afraid to violate ? Yet the exposition, that is, the murder of new-born infants, was a practice allowed [II-46] of in almost all the states of Greece, even among the polite and civilized Athenians; and whenever the circumstances of the parent rendered it inconvenient to bring up the child, to abandon it to hunger, or to wild beasts, was regarded without blame or censure. This practice had probably begun in times of the most savage barbarity. The imaginations of men had been first made familiar with it in that earliest period of society, and the uniform continuance of the custom had hindered them afterwards from perceiving its enormity. We find, at this day, that this practice prevails among all savage nations; and in that rudest and lowest state of society it is undoubtedly more pardonable than in any other. The extreme indigence of a savage is often such that he himself is frequently exposed to the greatest extremity of hunger, he often dies of pure want, and it is frequently impossible for him to support both himself and his child. We cannot wonder, therefore, that in this case he should abandon it. One who, in flying from an enemy, whom it was impossible to resist, should [II-47] throw down his infant, because it retarded his flight, would surely be excusable; since, by attempting to save it, he could only hope for the consolation of dying with it. That in this state of society, therefore, a parent should be allowed to judge whether he can bring up his child, ought not to surprise us so greatly. In the latter ages of Greece, however, the same thing was permitted from views of remote interest or conveniency, which could by no means excuse it. Uninterrupted custom had by this time so thoroughly authorised the practice, that not only the loose maxims of the world tolerated this barbarous prerogative, but even the doctrine of philosophers, which ought to have been more just and accurate, was led away by the established custom, and upon this, as upon many other occasions, instead of censuring, supported the horrible abuse, by far-fetched considerations of public utility. Aristotle talks of it as of what the magistrate ought upon many occasions to encourage. The humane Plato is of the same opinion, and, with all that love of mankind which seems [II-48] to animate all his writings, no where marks this practice with disapprobation. When custom can give sanction to so dreadful a violation of humanity, we may well imagine that there is scarce any particular practice so gross which it cannot authorise. Such a thing, we hear men every day saying, is commonly done, and they seem tơ think this a sufficient apology for what, in itself, is the most unjust and unreasonable conduct.

There is an obvious reason why custom should never pervert our sentiments with regard to the general style and character of conduct and behaviour, in the same degree as with regard to the propriety or unlawfulness of particular usages. There never can be any such custom. No society could subsist a moment, in which the usual strain of men's conduct and behaviour was of a piece with the horrible practice I have just now mentioned.

Again, we can see a certain tension in AS’s thought between accepting some “uninterrupted and established custom” as good and necessary, and some others as “barbaric” and gross violations of “natural jurisprudence” and “the natural propriety of action”. One might ask what would the impartial spectator have to say about custom? If the “just man” needs to assess the custom of infanticide in the light of these principles, why shouldn’t he do the same for all customs in order to determine their suitability to “the system of natural liberty”?

The power and wealth of the existing ruling elites

A. The Power of Entrenched Vested Interests: the mercantilist manufacturers and protected large landowners

The problem was that ordinary people of “low rank” were not pushing hard for reform from below, but those entrenched vested interests were willing and able to fight very hard from above to protect those interests. This was very strongly demonstrated in two cases which AS discussed, that of mercantilist manufacturers and protected large landowners; and that of slave owners.

AS thought that the likelihood of ending the privileges and protection which the large and influential mercantilist manufacturers and landowners had, and introducing a policy of free trade, was very slim and probably “utopian”. The following paragraph is good example of his pessimism. It is also interesting for the comparison he makes with the vested interests of the senior officers in the army who in a similar manner to the manufacturers endeavour to protect their privileges and income from any cuts by a government which wished to reduce the burden of the armed forces on the taxpayers. He sharply remarks that the protected and subsidized manufacturers are now like a new and “overgrown standing army” which is now powerful enough “to intimidate the legislature” into granting them their wishes:

[WN IV.ii.43 ; I-206 and II-54-55 online]: To expect, indeed, that the freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceana or Utopia should ever be established in it. Not only the prejudices of the publick, but what is much more unconquerable, the private interests of many individuals, irresistibly oppose it. Were the officers of the army to oppose with the same zeal and unanimity any reduction in the number of forces, with which master manufacturers set themselves against every law that is likely to increase the number of their rivals in the home market; were the former to animate their soldiers, in the same manner as the latter enflame their workmen, to attack with violence and outrage the proposers of any such regulation; to attempt to reduce the army would be as dangerous as it has now become to attempt to diminish in any respect the monopoly which our manufacturers have obtained against us. This monopoly has so much increased the number of some particular tribes of them, that, like an overgrown standing army, they have become formidable [I-207] to the government, and upon many occasions intimidate the legislature.~59~ The member of parliament who supports every proposal for strengthening this monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest publick services can protect him from the most infamous abuse and detraction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists.

B. The Power of Entrenched Vested Interests: the slave owners

As we showed above, AS thought that slavery was a gross violence of the natural rights of the person to their life, liberty and property. One can find at least a dozen powerful criticisms of slavery in WN and LJ to illustrate this. The ones which interest us here are those he uses to demonstrate the difficulty, perhaps impossibility, of abolishing slavery in the near term.

The problem was the combination of the self-interest of the slave owners to exploit slave labour for their own profit and benefit, with their natural “love of domination” over others who were their inferiors in rank. The problem was made worse by the apparent contradiction that he observed in the inverse relationship between the amount of freedom enjoyed by “the free” and the degree of slavery suffered by “the slave”.

The following passages show AS’s thinking on this quite clearly.

On the “the love of domination and authority and the pleasure men take in having everything done by their express orders” and “the love of dominion and authority over others” - [LJ(B) iii.114].

On “that tyranic disposition which may almost be said to be natural to mankind” - [LJ (B) 134]

On the inverse relationship between the freedom enjoyed by “the free, and the slavery suffered by “the slave - [LJ (A), iii. 111-12: 185; Wed 16 Feb. 1763] and [LJ (B) 134].

I will quote here AS’s long and very pessimistic assessment of the chances of the abolition of slavery in the short to mid-term based upon his arguments about the self-interest of the slaveowners and their “the love of domination and authority” and of “tyrannizing” over others. In fact, he was so pessimistic that he thought it would be “perpetual”:

[LJ(B) iii.114]: … Notwithstanding of these superior [of] advantages it is not likely that slavery should be ever abolished, and it was owing to some peculiar circumstances that it has been abolished in the small corner of the world in which it now is. In a democraticall government it is hardly [hardly] possible that it ever should, as the legislators are here persons who are each masters of slaves; they therefore will never incline to part with so valuable a part of their property; and tho as I have here shewn their real interest would lead them to set free their slaves and cultivate their lands by free servants or tenents, yet the love of domination and authority and the pleasure men take in having everything done by their express orders, rather than to condescend to bargain and treat with those whom they look upon as their inferiors and are inclined to use in a haughty way; this love of domination and tyrannizing, I say, will make it impossible for the slaves in a free country ever to recover their liberty.— In a monarchicall and absolute government their condition will possibly be a good deal better; the monarch [115] here being the sole judge and ruler, and not being affected by the easing the condition of the slaves, may probably incline to mitigate their condition; and this we see has been done in all arbitrary governments in a considerable degree. The condition of the slaves under the absolute government of the emperors was much more tollerable than under the free one of the Republick. But although the authority of the sovereign may go a considerable way in the mitigating of the condition of slaves, yet it never has and can never proceed so far as to abolish slavery altogether. In all countries where slavery takes place[s] the greatest part of the riches of the subjects consists in slaves. If he is possessed of a land estate the whole management of it is carried on by the slaves; without them there can be nothing done; they work and till the ground, and practise every thing else that is necessary to the cultivation of the land or the support of their master. A man of a considerable estate would have some thousands of slaves upon it, and the meaner sort in proportion, but allmost every one if the country be tollerably wealthy will have some slaves; and in them the greatest part [116] of their wealth will consist. In the same manner we see at this time the great stock of a West India planter consists in the slaves he has in his plantation. To abolish slavery therefore would be to deprive the far greater part of the subjects, and the nobles in particular, of the chief and most valuable part of their substance. This they would never submit to, and a generall insurrection would ensue. For no single man ever had or possibly could have power sufficient to enable him to strip his subjects in that manner. If he set a slave at liberty this was robbing his master of the whole value of him. This therefore could never take place. This institution therefore of slavery, which has taken place in the beginning of every society, has hardly any possibility of being abolished. The government in the first stages of society is as I said very weak, and can not interpose much in the affairs of individualls. Government is far advanced before the legislative power can appoint judges at pleasure, as is now the case in Britain where the king can [117] appoint any one a judge he pleases who is a lawyer by profession, and for the lower judiciall offices any one he pleases. This could not be done in an early society. The people would not submit themselves in that manner. The government therefore would find it necessary to take advantage of the superiority and authority of certain persons who were respected in the country and put the judicial power into their hands. Jurisdictions were in this manner established, and the same cause made it necessary to strengthen the hands of all private masters of families. Slavery therefore has been universall in the beginnings of society, and the love of dominion and authority over others will probably make it perpetuall. The circumstances which have made slavery be abolished in the corner of Europe in which it now is are peculiar to it, and which happening to concurr at the same time have brought about that change.

AS’s own conservative reluctance to challenge the status quo

Overall it appears that AS was in two minds about the prospects for “natural liberty”. At times he could say that the transition to a “system of natural liberty” was inevitable as it was a kind of natural process which continue to operate in spite of impedimetns it might face and would prevail eventually. At other times when it came to the abolition of the “mercantile system” or slavery he was very pessimistic, even without hope that it would ever happen, as it (slavery) too seemed “to be natural to mankind” [LJ (B) 134].

AS also seemed to have boxed himself into a dilemma, as he thought in the struggle of the monarchy to subdue powerful nobles the moderation (but not the abolition) of slavery was a weapon the monarch could use against “his vassals.” As he stated in LJ(B):

[LJ (B) 134]: In a monarchy there is a better chance for it’s being abolished, because one single person is lawgiver [135] and the law will not extend to him nor diminish his power, tho’ it may diminish that of his vassals. In a despotic government slaves may be better treated than in a free government, where every law is made by their masters, who will never pass any thing prejudicial to themselves. … Slavery, then, may be gradualy softened under a monarch, but not entirely abolished, because [136] no one person whatever can have so much authority as to take away at once the most considerable part of the nation’s property, because this would occasion a general insurrection.

This dilemma was deepened when he realized that in a society which permitted slavery to exist, as wealth and freedom increased for some the misery of slavery increased for many others. Therefore, a “humane and just man” like himself should wish that this increase in wealth and freedom should not take place:

[LJ (A), iii. 111-12: 185; Wed 16 Feb. 1763] … The more society is improved the greater is the misery of a slavish condition; they are treated much better in the rude periods of mankind than in the more improved. Opulence and refinement tend greatly to increase their misery. The more arbitrary the government is in like manner the slaves are in the better condition, and the freer the people the more miserable are the slaves; in a democracy they are more miserable than in any other. [111] The greater the freedom of the free, the more intollerable is the slavery of the slaves. Opulence and freedom, the two greatest blessings men can possess, tend greatly to the misery of this body of men, which in most countries where slavery is allowed makes by far the greatest part. A humane man would wish therefore if slavery has to be generally established that these greatest blessings, being incompatible with the happiness of the greatest part of mankind, were never to take place.

The thought that the slaves might take matters into their own hands to hasten their liberation from the tyranny of slavery, or that the consumers might do the same to relieve themselves of the burden of tariffs and monopolies seemed beyond his comprehension. His dismisses such a thought in a passage in TMS [TMS II-395-99 online][this is quoted in full above] by saying that if individuals sought justice “at his own hand whenever he fancied” it would result in “a scene of bloodshed and disorder”. In order to prevent this he argues, “the magistrate” has the authority “to do justice to all, and promises to hear and to redress every complaint of injury”. But the question he does not considerate least in the salves’ case, what are the slaves to do when oppressed systematically by an unjust “system:” in which the magistrate takes the side of the slaveowners in protecting “their property”?

Thomas Jefferson, of course, answered that very question in “The Declaration of Independence” in the very year WN was published. In terms AS would find very congenial (even with a reference to “the man of prudence”):

Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

If this were true for the white colonists in North America, it is certainly true for the black slaves they owned and exploited.

But AS’s fear of “disorder” and uncertainty was enough to make him consider the idea that slavery should remain a permanent feature of society, strangely enough for the benefit of the slaves. This was a bizarre position for a liberal to hold.

Another example of this hesitancy to reform society concerned reforming the mercantile system which was necessary to “restore” “the natural system of perfect liberty and justice” which had been disrupted by the mercantilist “system of restraint and regulation”. The mercantilist system had “introduce(d) very dangerous disorders into the state of the body politick,” which of course AS had famously documented at some length. However, at times AS seems more concerned with what he imagined would be the “still greater disorders” of any “remedy” which might be needed to bring an end to the original disorders caused by the mercantilist system. In this passage he seems to be arguing that we would need to know ahead of time exactly in what order the “restraints” on trade should be lifted, what should be lifted first, what last, and what steps would be best to “gradually” restore “the natural system of perfect liberty and justice”. Presumably, if we not not have such a detailed “roadmap” for reform we should not implement the reforms. This means in practice that reform would be indefinitely postponed until such an agreed upon roadmap was found, which, again, is a bizarre position for a liberal to hold. In the end AS is left washing his hands of the project deferring to “the wisdom of future statesmen and legislators to determine”:

[WN II-211 online] : Such are the unfortunate effects of all the regulations of the mercantile [427] system! They not only introduce very dangerous disorders into the state of the body politick, but disorders which it is often difficult to remedy, without occasioning, for a time at least, still greater disorders. In what manner, therefore, the colony trade ought gradually to be opened; what are the restraints which ought first, and what are those which ought last to be taken away; or in what manner the natural system of perfect liberty and justice ought gradually to be restored, we must leave to the wisdom of future statesmen and legislators to determine.

Yet, a few paragraphs later, AS admits that a major weakness of the mercantile system is that it is impossible for the sovereign (or any other “central planner” for that matter) to be wise or knowledgeable enough to plan and direct “the industry of private people”, or to know what is “most suitable to the interest of the society”. Surely the same could be said about the sovereign should he ever decide to “plan” the gradual dismantling of the mercantile system?

[WN II-289 online] : All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. [59] Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society.

In attempting to do this, the sovereign would become a “man of system” whose hand would move the pieces of the mercantilist system around the chess-board of the economy. Something which AS sharply derided in TMS. [TMS II-110-111 online].

Part of the problem with AS’s hesitancy about reform and his fear of disorder which reform might entail comes from his own rather illiberal disposition to defer to superior rank and authority, in this case his god or perhaps “Nature” or even “Nature’s God”.[17] If we go back to the quote about the difference between what “Nature” (or god) thinks we should do and what “the doctrine of reason and philosophy”, i.e. of “natural justice”, says we should do, his argument about not rushing into radical reforms makes more sense:

[TMS I-128 online] : Even when the order of society seems to require that we should oppose them, we can hardly bring ourselves to do it. That kings are the servants of the people, to be obeyed, resisted, deposed, or punished, as the public conveniency may require, is the doctrine of reason and philosophy; but it is not the doctrine of Nature. Nature would teach us to submit to them for their own sake, to tremble and bow down before their exalted station, to regard their smile as a reward sufficient to compensate any services, and to dread their displeasure, though no other evil were to follow from it, as the severest of all mortifications.

AS spells out in some detail his understanding of the role of the great “central planner in the sky”, the person with the highest rank imaginable, in a quite unsettling short chapter on the submission of the individual to the “father” or the commanding “general” of the universe. [TMS II-113 ff. online]. When this chapter is read with the plight of the “inferior ranks or orders” in society in mind, such as the slaves in the colonies, or those tradesmen or small merchants put out of work by the mercantile system, one might better understand the intellectual plight in which AS found himself when advocating reform of these unjust “systems”.

Although he asserts here that all this “administering” is done in the name of “benevolence”, this “administrator,” “father”, “director,” “general,” or “conductor” has “contrived and conducted” a “universe,” a “machine”, or Nature itself, which has powerful “natural” forces at its core which have produced injustice and suffering from the beginning of human societies. For example, on the one hand there are some very illiberal “dispositions” built into this “order” such as the natural disposition to defer to and obey whoever is in authority; the natural “tyranic disposition” which drives some people to “dominate” others; and that fact that monarchy, rule by superior ranks, and slavery are “natural” and have been a feature of human society from the beginning and, in the case of slavery may be originall, “universall” and “perpetuall”.

Against these illiberal natural forces and dispositions are some perhaps equally powerful liberal forces and dispositions which have also been built in and are at work. These include the strong impulse to protect one’s rights to life, liberty and property; the inclination to truck and barter with others to better their condition; the disposition to be sociable with one’s family, neighboring, community and church; and the rather impersonal but force of the “invisible hand” which directs private self-interest into a social beneficial direction.

The question one has to ask oneself is which of the two sets of forces or “dispositions” in human hearts are the strongest, which one will prevail over the other, or is humanity condemned to suffer the con sequences of a constant battle between the two.

In this paper I have identified the many different types of ranks, orders, and privileged classes which AS mentioned in his main writings TMS, LJ, and WN, and to show the interrelationships between them. In this problematical chapter in TMS there seems to be only one god and one Nature created by that god, but, like Shiva, it has many different names. Here is a list of them:

  1. “that great, benevolent, and all-wise Being, who directs all the movements of nature”
  2. the opposite is “a fatherless world”, which presumes that what AS wants is a “world with a father”
  3. “God himself is the immediate administrator and director”
  4. “the great Director of the universe”
  5. we are like “good soldiers” who love and trust their “general”
  6. “the great Conductor of the universe”
  7. “that divine Being (who has) contrived and conducted the immense machine of the universe”
  8. “the administration of the great system of the universe”

Whatever this being or god is called, AS advises “the wise and virtuous man” to accept his station in life (in other words his lower rank compared to that of his good) and his fate in the ups and downs of that life; that "his own particular order” might have to be “sacrificed to the greater interest of the state or sovereignty, of which it is only a subordinate part”; and that he should “with humble resignation … submit to this allotment”. If one replaced the phrase “the wise and virtuous man” with “someone of the lowest and most inferior rank” (such as a slave) it makes for interesting and troubling reading.

The section is quite long, so here is an abbreviated version of it:

[TMS II-113 ff. online’: all the inhabitants of the universe, the meanest as well as the greatest, are under the immediate care and protection of that great, benevolent, and all-wise Being, who directs all the movements of nature; and who is determined, by his own unalterable perfections, to maintain in it, at all times, the greatest possible quantity of happiness. To this universal benevolence, the contrary, the very suspicion of a fatherless world, must be the most melancholy of all reflections; …

The wise and virtuous man is at all times willing that his own private interest should be sacrificed to the public interest of his own particular order or society. He is at all times willing, too, that the interest of this order or society should be sacrificed to the greater interest of the state or sovereignty, of which it is only a subordinate part. He should, therefore, be equally willing that all those inferior interests should be sacrificed to the greater interest of the universe, to the interest of that great society of all sensible and intelligent beings, of which God himself is the immediate administrator and director. If he is deeply impressed with the habitual and thorough conviction that this benevolent and all-wise Being can admit into the system of his government, no partial evil which is not necessary for the universal good, he must consider all the misfortunes which may befal himself, his friends, his society, or his country, as necessary for the prosperity of the universe, and therefore as what he ought, not only [II-116] to submit to with resignation, …

Nor does this magnanimous resignation to the will of the great Director of the universe, seem in any respect beyond the reach of human nature. Good soldiers, who both love and trust their general, frequently march with more gaiety and alacrity to the forlorn station, from which they never expect to return, than they would to one where there was neither difficulty nor danger. …

No conductor of an army can deserve more unlimited trust, more ardent and zealous affection, than the great Conductor of the universe. In the greatest public as well as private disasters, a wise man ought to consider that he himself, his friends and countrymen, have only been ordered upon the forlorn station of the universe; that had it not been necessary for the good of the whole, they would not have been so ordered; and that it is their duty, not only with humble resignation to submit to this allotment, but to endeavour to embrace it with alacrity and joy. A wise man should surely be capable of doing what a good soldier holds himself at all times in readiness to do.

The problem for liberal reformers like AS is that some of the most inferior ranks might be unwilling to sacrifice forever their well-being and their lives for the betterment of the higher ranks of society, and might no longer “submit … with resignation” to this fate. The fact that AS thinks like this and seems to be troubled by its implications, but is still not willing to take a harder stand for reform measures, shows that he is a moderate not a radical liberal, or as Lisa Hill calls him a “pragmatic” liberal. I interpret this to mean that he is inconsistent in sticking to his beliefs about the “natural rights” of all individuals and the desirability of “the system of natural liberty”, that he is too willing to defer to some individuals of high rank (such as his god and his king), and thus is willing to allow too many concessions to those in power and the institutions which they control.

 

 

Endnotes↩

[1] Lisa Hill, Adam Smith’s Pragmatic Liberalism : The Science of Welfare (Palgrave Macmillan, 2020); Paul Sagar, Adam Smith Reconsidered: History, Liberty, and the Foundations of Modern Politics (Princeton, N.J.: Princeton University Press, 2022).

[2] The chapter on “Class” in The Routledge Companion to Libertarianism. Edited by Matt Zwolinski and Benjamin Ferguson (Routledge, 2022) , pp. 291-307. See much longer versions of this chapter in “Plunderers, Parasites, and Plutocrats: Some Reflections on the Rise and Fall and Rise and Fall of Classical Liberal Class Analysis.” Paper given at the Libertarian Scholars Conference, The Kings College, NYC, 20 Oct. 2018. http://davidmhart.com/liberty/Papers/Plunderers/DMH-PPP-Oct2018.html; and “Libertarian Class Analysis: An Historical Survey” Sept. 2020; 15 July, 2023) <davidmhart.com/liberty/ClassAnalysis/HistoricalSurvey/index.html>. Also an anthology of keys texts I co-edited: Social Class and State Power: Exploring an Alternative Radical Tradition, ed. David M. Hart, Gary Chartier, Ross Miller Kenyon, and Roderick T. Long (Palgrave Macmillan, 2018).

[3] Paul Sagar, The Opinion of Mankind: Sociability and the Theory of the State from Hobbes to Smith (Princeton, N.J.: Princeton University Press, 2018), p. 3.

[4] A recent survey of Marxist theory of class is Henry Heller, "Class and Class Struggle" in The Oxford Handbook of Karl Marx (OUP 2019), pp. 57-76.

[5] The classic statement of this (from a Marxist perspective) can be found in Ronald L. Meek, Social Science and the Noble Savage (Cambridge University Press, 1976).

[6] Wherever possible I have used the Glasgow edition of the works of AS. I also make use of editions of his work which I have put on my own website - what I call “near replicas” of the important editions of his works which appeared in his lifetime. Adam Smith, Lectures On Jurisprudence, ed. R.. L. Meek, D. D. Raphael and P. G. Stein, vol. V of the Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1982). Henceforth “LJ”. Also my edition of the Edwin Cannan edition of 1896: Adam Smith, Lectures on Justice, Police, Revenue and Arms. Delivered In The University of Glasgow by Adam Smith. Reported by a Student in 1763. And Edited with an Introduction and Notes by Edwin Cannan (Oxford: Clarendon Press, 1896). online.

[7] Adam Smith, The Theory of Moral Sentiments, ed. D.D. Raphael and A.L. Macfie, vol. I of the Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1982). Henceforth “TMS”. Also my edition of the revised 1790 edition online.

[8] Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations,Vol. I and II, ed. R. H. Campbell and A. S. Skinner, vols. II and III of the Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1981). Henceforth “WN”. Also my edition of the first edition of 1776 online

[9] There are 10 references to “natural liberty” in WN.

[10] I have counted about 30 such “characters” which I have categorized as follows. The “good” man: the man of reflection, the wise man, the virtuous man, the worthy man, the humane man, the prudent man, the just man. The bad "man" (or one who has some negative connotation): the man of system, the ambitious man, the party man, the vain man. Other "men" (without obvious moral significance): the man of rank and distinction, the man of spirit and ambition, the man of inferior rank, the humbled and afflicted man, the monied man, the trades man, the man of a considerable estate. Observers and onlookers: the man within the breast, the impartial observer, the partial observer. And various “conductors”, ‘directors”, administrators”, “beings”, and “generals” who appear from time to time.

[11] In TMS there are 63 occurrences of the word “rank”, for example, there are “higher” and “superior” ranks which are contrasted with “inferior” and “middling” ranks. The word is sometimes paired with another word, such as “rank and dignity”, “rank and preheminence”, “rank and distinction,” “credit and rank”, “rank and fortune.” There are also combinations of phrases, such as “the distinction of ranks and the order of society”. There are also 38 occurrences of the word “station,” as in inferior station, superior, former, exalted, meaner, high, inferior and middling station, natural, private and public station, humble, private, forlorn, splendid and honorable, proper station.

[12] My division of the way in which rank might be “acquired” is based upon Franz’s Oppenheimer’s similar division of the means by which “wealth” is acquired, namely “das ökonomische Mittel” (the economic means) and “das politische Mittel” (the political means) of acquiring wealth, with the state being defined as “die Organisation des politischen Mittels” (the organization of the political means) of acquiring wealth. See, Franz Oppenheimer, Der Staat (Frankfurt am Main: Rütten & Loening, 1907), pp. 14, 27 online. And the English translation, Franz Oppenheimer, The State: Its History and Development viewed Sociologically, authorized translation by John M. Gitterman (New York: B.W. Huebsch, 1922). Quote p. 237.

[13] There are three references to “man of system” in TMS.

[14] Adam Smith was reticent to support the use of violence to free oneself of oppressive government but he would lose this reticence in 1776 when he supported the independence of the North American colonies from Britain. See in WN [WN, vol. II, IV.vii.c.66, pp. 616 ff. and WN, vol. II, IV.vii.c, p. 623].

[15] See Lisa Hill, “Adam Smith and the Theme of Corruption”, The Review of Politics, Vol. 68, No. 4 (Fall, 2006), pp. 636-662; and “Adam Smith on Politics” in Adam Smith’s Pragmatic Liberalism : The Science of Welfare (2020), pp. 636–48. Also Paul Sagar, “Whose Corruption, Which Polity,” in Adam Smith Reconsidered: (2022), pp. 143-86.

[16] See in particular Molinari’s article "De la production de la sécurité," Journal des Economistes, Vol. XXII, no. 95, 15 February, 1849), pp. 277-90 where he quotes Smith <davidmhart.com/liberty/FrenchClassicalLiberals/Molinari/Articles/ProductionSecurite2.html#ftn4>; and his chapter 11 on the private production of security and legal services in his book Les Soirées de la rue Saint-Lazare; entretiens sur les lois économiques et défense de la propriété. (Paris: Guillaumin, 1849) where he also quotes AS’s passage on the fees of court, pp. 320-21. The book online <davidmhart.com/liberty/FrenchClassicalLiberals/Molinari/Books/1849_Soirees/Soirees.html>. See also my discussion of Molinari’s views in David M. Hart, "Was Molinari a true Anarcho-Capitalist?: An Intellectual History of the Private and Competitive Production of Security" (Sept. 2019). A paper given at the Libertarian Scholars Conference, NYC. Online <davidmhart.com/liberty/Papers/Molinari/ProductionSecurity/index.html>.

[17] On the subtle differences between God, Natures and Nature’s God see Matthew Stewart, Nature’s God: The Heretical Origins of the American Republic (NewYork: W.W. Norton, 2014).

 

 

Bibliography↩

Hart, David M. The chapter on “Class” in The Routledge Companion to Libertarianism. Edited by Matt Zwolinski and Benjamin Ferguson (Routledge, 2022) , pp. 291-307.

Hart, David M. “Libertarian Class Analysis: An Historical Survey” (Sept. 2020; revised 15 July, 2023) <davidmhart.com/liberty/ClassAnalysis/HistoricalSurvey/index.html>.

David M. Hart, "Was Molinari a true Anarcho-Capitalist?: An Intellectual History of the Private and Competitive Production of Security" (Sept. 2019). A paper given at the Libertarian Scholars Conference, NYC. Online <davidmhart.com/liberty/Papers/Molinari/ProductionSecurity/index.html>.

Hart, David M. “Plunderers, Parasites, and Plutocrats: Some Reflections on the Rise and Fall and Rise and Fall of Classical Liberal Class Analysis.” Paper given at the Libertarian Scholars Conference, The Kings College, NYC, 20 Oct. 2018. http://davidmhart.com/liberty/Papers/Plunderers/DMH-PPP-Oct2018.html. test link

Hart, David M. et al. Social Class and State Power: Exploring an Alternative Radical Tradition, ed. David M. Hart, Gary Chartier, Ross Miller Kenyon, and Roderick T. Long (Palgrave Macmillan, 2018).

Heller, Henry. "Class and Class Struggle" in The Oxford Handbook of Karl Marx (OUP 2019), pp. 57-76.

Hill, Lisa. Adam Smith’s Pragmatic Liberalism : The Science of Welfare (Palgrave Macmillan, 2020).

Hill, Lisa. “Adam Smith and the Theme of Corruption”, The Review of Politics, Vol. 68, No. 4 (Fall, 2006), pp. 636-662.

Meek, Ronald L. Social Science and the Noble Savage (Cambridge University Press, 1976).

Molinari, Gustave de. "De la production de la sécurité," Journal des Economistes, Vol. XXII, no. 95, 15 February, 1849), pp. 277-90. Online in French <davidmhart.com/liberty/FrenchClassicalLiberals/Molinari/Articles/ProductionSecurite2.html>. My English translation “The Production of Security” <davidmhart.com/liberty/FrenchClassicalLiberals/Molinari/Articles/ProductionSecurite1.html>.

Molinari, Gustave de. Les Soirées de la rue Saint-Lazare; entretiens sur les lois économiques et défense de la propriété. (Paris: Guillaumin, 1849). My online version <davidmhart.com/liberty/FrenchClassicalLiberals/Molinari/Books/1849_Soirees/Soirees.html>.

Oppenheimer, Franz. Der Staat (Frankfurt am Main: Rütten & Loening, 1907). My online version online.

Oppenheimer, Franz. The State: Its History and Development viewed Sociologically, authorized translation by John M. Gitterman (New York: B.W. Huebsch, 1922).

Sagar, Paul. Adam Smith Reconsidered: History, Liberty, and the Foundations of Modern Politics (Princeton, N.J.: Princeton University Press, 2022).

Sagar, Paul. The Opinion of Mankind: Sociability and the Theory of the State from Hobbes to Smith (Princeton, N.J.: Princeton University Press, 2018).

Smith, Adam. Lectures On Jurisprudence, ed. R.. L. Meek, D. D. Raphael and P. G. Stein, vol. V of the Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1982).

Smith, Adam. Lectures on Justice, Police, Revenue and Arms. Delivered In The University of Glasgow by Adam Smith. Reported by a Student in 1763. And Edited with an Introduction and Notes by Edwin Cannan (Oxford: Clarendon Press, 1896). My online version online.

Smith, Adam. The Theory of Moral Sentiments, ed. D.D. Raphael and A.L. Macfie, vol. I of the Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1982).

Smith, Adam. The Theory of Moral Sentiments; Or, An Essay towards an Analysis of the Principles by which Men naturally judge concerning the Conduct and Character, first of their Neighbours, and afterwards of themselves. To which is added, a Dissertation on the Origin of Languages. By Adam Smith, LL. D. Fellow of The Royal Societies of London and Edinburgh; One of the Commissioners of His Majesty's Customs in Scotland; And formerly Professor of Moral Philosophy in the University Of Glasgow. (Printed for A. Strahan; and T. Cadell in The Strand; and W. Creech, and J. Bell and Co. at Edinburgh. MDCCXC.) My online version http://davidmhart.com/liberty/EnglishClassicalLiberals/Smith/TMS/1790/index.html

Smith, Adam. An Inquiry Into the Nature and Causes of the Wealth of Nations,Vol. I and II, ed. R. H. Campbell and A. S. Skinner, vols. II and III of the Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1981).

Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. By Adam Smith, LL.D. and F.R.S. Formerly Professor of Moral Philosophy in the University of Glasgow. In Two Volumes. (London: Printed for W. Strahan; and T. Cadell, in The Strand, MDCCLXXVI (1776)). My online version of the first edition of 1776 http://davidmhart.com/liberty/EnglishClassicalLiberals/Smith/WoN/1776-edition/index.html.

Stewart, Matthew. Nature’s God: The Heretical Origins of the American Republic (NewYork: W.W. Norton, 2014).