Who Is the Real Adam Smith? An economist rereads the father of the free market for the 21st century by Paul Mattick.
t’s hardly an accident that a contemporary investment guru took Adam Smith as his nom de tube. More than just the father of economics, Smith is the totemic ancestor of the free market idea itself, the system that since the fall of Communism in the East and the triumph of fiscal conservatism in the West supposedly rules the world under the name of neoliberalism. And indeed, according to Emma Rothschild, the start of the 21st century shares with the late 18th, Smith’s period, ‘’the rhetoric of freedom of commerce’’ and ‘’the sense of living in a society of universal commerce and universal uncertainty.’’ But where today’s economics exalts ‘’cold and rational calculation,’’ Smith — as Rothschild argues in an attempt to recover his insights for the present day — saw economics as ‘’intertwined with the life of sentiment and imagination.’’ Director of the Center for History and Economics at King’s College, Cambridge, Rothschild wants to bring Smith back as an apostle not of heartless market forces but of capitalism with a human face, as it might have appeared at the dawn of modernity and as, she hints, it might appear again today.
In her readable as well as scholarly book, ‘’Economic Sentiments,’’ she links Smith with the French philosopher the Marquis de Condorcet, another thinker seen today as an emblem of ‘’cold, hard and rational enlightenment’’ but in reality interested, like Smith, ‘’in economic life as a process of discussion, and as a process of emancipation,’’ in which ‘’one’s freedom to buy or sell or lend or travel or work is difficult to distinguish from the rest of one’s freedom.’’ This larger picture, Rothschild thinks, is what was lost as economics developed along with the society it analyzed, and what she hopes to restore.
The French Revolution, during which Condorcet died in prison despite — or because of — his devotion to democracy, marked a watershed in politico-economic thought: the political restoration of the monarchy in the early 1800’s was accompanied by a recasting of laissez-faire economics as the coalition partner of political conservatism. The present moment, Rothschild suggests, is another watershed: the worldwide triumph of the perpetually destabilizing market principle has brought with it the end of conservative certainty, and the opportunity for a fresh look at the lessons of the Enlightenment.
Smith, as Rothschild reads him, did not see state and market as competing principles, as later free-market ideologues were to do, just as Condorcet was not actually the prophet of the authoritarian state he is often taken to have been. For these thinkers, ‘’the ‘state’ and the ‘market’ were not . . . two imposing and competing dominions of society’’ but were ‘’interdependent.’’ Indeed, ‘’The Wealth of Nations’’ calls for legal reforms, such as the repeal of statutes restricting workers’ movement into trades and between localities (and keeping some wages above their so-called natural levels). Rothschild is misleading, however, in describing this as governmental activism. What Smith wants from the state, for the most part, is to get out of the way of the ‘’natural system of liberty’’ in which each man looks after his interests on his own. Rothschild would like to combat the conventional view of Smith as a critic of state regulation of the economy. However, she obscures the radical significance of his writing for his own time as well as for later generations.
The extent to which Rothschild goes beyond correcting a one-sided image of Smith to distorting his views herself is most striking in the chapter she devotes to his idea of the ‘’Invisible Hand.’’ Smith, she claims, ‘’did not especially esteem the invisible hand,’’ taken as a promise ‘’that society will in fact turn out to be prosperous, or orderly, in the absence of government direction.’’ In her view, he invoked the phrase ironically, mocking theorists who believe in systems of unintended order. Rothschild’s somewhat postmodern Smith thinks of market transactions as a mode of conversation in which individuals work out the moral and social significance of their actions with the self-awareness that, as a man of the Enlightenment, he saw as the birthright of everyone, not just philosophers.
But the enlightened thinker, after all, offers a different service for sale than the enlightened farmer or laborer, within the division of labor that Smith (and Condorcet) took as fundamental to modern society. Smith’s basic idea is that ‘’every individual can judge much better than any statesman or lawgiver can do for him’’ how best to employ his capital and energy; and further, ‘’that the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous for the society.’’ With respect to economic questions, the individual need only think about his immediate interests, preferably in as enlightened a manner as possible; while the theorist may understand how individual advantage serves the social interest, it’s not his understanding but the market that works the magic. This is why Smith calls not for regulation of trade following his prescriptions but for the system of ‘’natural liberty’’ allowing every one to act, as far as is practically possible, as he wishes. Despite the fact, often noted, that the phrase occurs only three times in Smith’s writings, the idea of the invisible hand is as central to his argument as it is generally held to be.
Rothschild doesn’t want to admit that the invocation of Smith as a theoretical mascot of laissez-faire registers an important historical truth: for all their insistence on natural equality and the virtues of individualism, neither Smith nor Condorcet could think beyond the limitations set to these principles by the social system that invented them. Just as a truly free market has never existed, so individual freedom has taken only those forms permitted by the laws of capitalist society. As Rothschild points out, ‘’the system of economic freedom is founded on the equality of all individuals, and it is at the same time subversive of equality.’’ But this means more than that; as she has it, we must be able ‘’to live without certainty’’ in a society that continually creates new opportunities while casting old decisions into doubt. It means that understanding forms of equality and freedom tied to inequality, and to subjection to the forces of state and market, calls for deeper modes of thought than those we have inherited from the 18th century.
Paul Mattick, professor of philosophy at Adelphi University, is the author of ‘’Social Knowledge’’ and editor of the International Journal of Political Economy
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PAUL MATTICK, Paul,, Who Is the Real Adam Smith? An economist rereads the father of the free market for the 21st century. https://archive.nytimes.com/www.nytimes.com/books/01/07/08/reviews/010708.08mattict.html Disponibilizaso em July 8, 2001 e consultado em 14 de março de 2022