The Adam Smith Review Volume 2: 02 [1 ed.] 0415394600, 9780415394604

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The Adam Smith Review Volume 2

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Adam Smith is well recognized as a forefather of modern economics but in recent years scholars have been exploring anew the multidisciplinary nature of his writings. The Adam Smith Review provides a unique forum for interdisciplinary debate on all aspects of Adam Smith’s works, his place in history, and the significance of his writings for the modern world. It is the only publication of its kind and is aimed at facilitating debate between scholars working across the humanities and social sciences, thus emulating the transdisciplinary reach of the Enlightenment world which Smith helped to shape. The second volume of this series contains contributions from a multidisciplinary range of specialists, including Jean-Pierre Dupuy, Samuel Fleischacker, Charles Griswold, Elias Khalil, Catherine Labio, Brendan Long, James Otteson, Ian Simpson Ross, Roberto Scazzieri, Eric Schliesser and Jeffrey Young, who discuss such themes as: ● ●

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Adam Smith’s moral theory and the theory of choice Adam Smith and the literary turn the unfinished nature of Smith’s oeuvre the relation between Adam Smith’s moral philosophy and economics

Vivienne Brown is Professor of Intellectual History at The Open University, UK. She is the author of Adam Smith’s Discourse: Canonicity, Commerce and Conscience (1994, Routledge) and numerous articles in a range of disciplinary and interdisciplinary journals. She is the founder/ editor of The Adam Smith Review on behalf of the International Adam Smith Society.

The Adam Smith Review Published in association with the International Adam Smith Society

Edited by Vivienne Brown Faculty of Social Sciences, The Open University, UK

Book Reviews Edited by James R. Otteson Department of Philosophy, University of Alabama, USA

Editorial Board Neil De Marchi (Department of Economics, Duke University, USA); Stephen Darwall (Department of Philosophy, University of Michigan, USA); Douglas Den Uyl (Liberty Fund, USA); Samuel Fleischacker (Department of Philosophy, University of Illinois, Chicago, USA); Charles L. Griswold Jr (Department of Philosophy, Boston University, USA); Knud Haakonssen (Department of History, University of Sussex, UK); Hiroshi Mizuta (Japan Academy, Japan); John Mullan (Department of English, University College London, UK); Takashi Negishi (Japan Academy, Japan); Nicholas Phillipson (Department of History, University of Edinburgh, UK); D.D. Raphael (Imperial College, London, UK); Emma Rothschild (King’s College, Cambridge, UK); Ian Simpson Ross (University of British Columbia, Canada); Richard B. Sher (Department of History, New Jersey Institute of Technology/Rutgers University-Newark, USA); Andrew S. Skinner (University of Glasgow, UK); Kathryn Sutherland (St Anne’s College, Oxford, UK); Keith Tribe (King’s School, Worcester, UK); Gloria Vivenza (Department of Economie, Società, Istituzioni, University of Verona, Italy); Donald Winch (Graduate Research Centre in the Humanities, University of Sussex, UK).

Books available in this series The Adam Smith Review (Volume 1) Edited by Vivienne Brown The Adam Smith Review (Volume 2) Edited by Vivienne Brown For latest information visit the web-site at: www.adamsmithreview.org

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The Adam Smith Review Volume 2

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Edited by Vivienne Brown

First published 2006 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Ave, New York, NY 10016

This edition published in the Taylor & Francis e-Library, 2006. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” Routledge is an imprint of the Taylor & Francis Group, an Informa business Published in association with the International Adam Smith Society © 2006 The International Adam Smith Society (www.adamsmithsociety.net) All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record for this book has been requested ISSN 1743–5285 ISBN 10: 0–415–39460–0 (hbk) ISBN 10: 0–203–96636–5 (ebk) ISBN 13: 978–0–415–39460–4 (hbk) ISBN 13: 978–0–415–39460–4 (ebk)

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Editorial

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The Adam Smith Review is a multidisciplinary annual review sponsored by the International Adam Smith Society. It provides a unique forum for vigorous debate and the highest standards of scholarship on all aspects of Adam Smith’s works, his place in history and the significance of his writings for the modern world. The Adam Smith Review aims to facilitate interchange between scholars working within different disciplinary and theoretical perspectives, and to this end it is open to all areas of research relating to Adam Smith. The Review also hopes to broaden the field of English-language debate on Smith by occasionally including translations of scholarly works at present available only in languages other than English. The Adam Smith Review is intended as a resource for Adam Smith scholarship in the widest sense. The Editor welcomes comments and suggestions, including proposals for symposia or themed sections in the Review. Future issues are open to comments and debate relating to previously published papers.

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For details of membership of the International Adam Smith Society and reduced rates for personal purchases of the Review, please contact the Membership Secretary, Aaron Garrett ([email protected]).

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Contents

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Editorial Notes on contributors

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Symposium: Adam Smith’s moral theory and the theory of choice

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GUEST EDITOR: ELIAS L. KHALIL

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Introduction: Smith the hedgehog

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ELIAS L. KHALIL

A Smithian theory of choice

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ROBERTO SCAZZIERI

Adam Smith and new institutional theories of property rights

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JEFFREY T. YOUNG

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Articulating practices as reasons: Adam Smith on the social conditions of possibility of property

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ERIC SCHLIESSER

Invidious sympathy in The Theory of Moral Sentiments 5

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JEAN-PIERRE DUPUY

Adam Smith’s natural theology of society

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BRENDAN LONG

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Perspectives on recent developments in Adam Smith scholarship

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The solution is in the text: a survey of the recent literary turn in Adam Smith studies

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CATHERINE LABIO

viii Contents Comments and debate

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On the incompleteness of Adam Smith’s system

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CHARLES L. GRISWOLD JR

Reply to Charles Griswold: ‘On the incompleteness of Adam Smith’s system’

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IAN SIMPSON ROSS

Is life a marketplace? Symposium on James R. Otteson’s Adam Smith’s Marketplace of Life

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Introduction

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FONNA FORMAN-BARZILAI

Why Adam Smith is neither a conservative nor a libertarian

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LAUREN BRUBAKER

Adam Smith: why decentralized systems?

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MARIA PIA PAGANELLI

Adam Smith’s theoretical endorsement of deception

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ERIC SCHLIESSER

Markets, markets everywhere: a brief response to critics

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JAMES R. OTTESON

Symposium on Samuel Fleischacker’s On Adam Smith’s ‘Wealth of Nations’

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Introduction

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RYAN PATRICK HANLEY

The portrait and the painter

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JERRY Z. MULLER

Wealth of Nations and social science

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FREDERICK NEUHOUSER

Adam Smith and the virtues DAVID RAYNOR

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On Adam Smith’s ‘Wealth of Nations’: response

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SAMUEL FLEISCHACKER

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Book reviews

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James E. Alvey, Adam Smith: Optimist or Pessimist? A New Problem Concerning the Teleological Basis of Commercial Society Reviewed by C R A I G S M I T H Response by J A M E S E . A L V E Y

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Michaël Biziou, Adam Smith et l’origine du libéralisme Reviewed by R I C H A R D B O Y D Response by M I C H A Ë L B I Z I O U

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Peter Groenewegen, Eighteenth-Century Economics: Turgot, Beccaria and Smith and Their Contemporaries Reviewed by C H R I S T O P H E S A L V A T

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Gordon Macintyre, Dugald Stewart: The Pride and Ornament of Scotland Reviewed by T H O M A S A H N E R T

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Leonidas Montes, Adam Smith in Context: A Critical Reassessment of Some Central Components of His Thought Reviewed by N E I L H A R G R A V E S Response by L E O N I D A S M O N T E S

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Keith Tribe (ed.) A Critical Bibliography of Adam Smith Reviewed by R I C H A R D F . T E I C H G R A E B E R I I I Response by K E I T H T R I B E

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Correction and clarification

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The registration of the Wealth of Nations

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RICHARD B. SHER

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Conference report

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Addendum

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Notes for contributors

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Illustrations

Figures Figure Figure Figure Figure Figure

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The general Adam Smith problem Individual states and collective beliefs Common property resources Efficient property rights definition Performance under centralized and decentralized systems

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Four usages of Nature

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Table Table 1

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Notes on contributors

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Thomas Ahnert is Lecturer in Early Modern Intellectual History in the School of History and Classics at the University of Edinburgh. His main interest is in the intellectual history of the German and Scottish Enlightenments. James E. Alvey is at Massey University, New Zealand and The University of Tokyo, Japan. He is currently a Postdoctoral Fellow of the Japan Society for the Promotion of Science and wishes to thank the Society for its support. He is currently writing a book for Edward Elgar on the history of the connection between economics and ethics. Michaël Biziou is Professor of Philosophy at the University of Nice (France). He works both on eighteenth-century British philosophy and on contemporary theories of liberalism. He has translated Smith’s Theory of Moral Sentiments into French (Paris: PUF 1999), and is currently translating Hume’s Treatise of Human Nature (Paris: Vrin, to be published). He has published three books: Le concept de système dans la tradition anglo-écossaise des sentiments moraux. De la métaphysique à l’économie politique (Shaftesbury, Hutcheson, Hume et Smith) (Lille: ANRT 2000), Adam Smith et l’origine du libéralisme (Paris: PUF 2003) and Shaftesbury. Le sens moral (Paris: PUF 2005). He has also edited Adam Smith et la Théorie des sentiments moraux, special issue of Revue philosophique de la France et de l’étranger (Paris: PUF 2000, 4).

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Richard Boyd is Associate Professor of Political Science at the University of Wisconsin-Madison. He has written extensively on the intellectual history of liberalism and is author of Uncivil Society: The Perils of Pluralism and the Making of Modern Liberalism (2004).

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Lauren Brubaker is a tutor at St. John’s College, Santa Fe and has also held visiting appointments at the University of Notre Dame (political science) and the United States Air Force Academy (philosophy). His articles on Smith have appeared in several edited volumes, most recently in New Voices on Adam Smith (2006) and Enlightening Revolutions (2006).

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Jean-Pierre Dupuy is a Professor of Social and Political Philosophy, École Polytechnique, Paris, and Professor of French and Political Science,

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Notes on contributors Stanford University. He is a member of the French Academy of Technology. His books include Self-Deceptions and Paradoxes of Rationality (1998); The Mechanization of the Mind – On the Origins of Cognitive Science (2000); Pour un catastrophisme éclairé (2002); Avions-nous oublié le mal? Penser la politique après le 11 septembre (2002); La Panique (2003); Petite métaphysique des tsunamis (2005); Retour de Tchernobyl (2006).

Samuel Fleischacker is Professor of Philosophy at the University of Illinois, Chicago. He specializes in moral and political philosophy, and the history of moral and political philosophy. His books include The Ethics of Culture (1994), A Third Concept of Liberty (1999), On Adam Smith’s ‘Wealth of Nations’ (2004) and A Short History of Distributive Justice (2004). Fonna Forman-Barzilai is Assistant Professor of Political Theory at the University of California, San Diego. Her work has appeared in Political Theory, History of Political Thought, Critical Review and New Voices on Adam Smith (2006). She is currently completing a manuscript, Adam Smith and the Circles of Sympathy, and is serving as Book Reviews Editor of The Adam Smith Review (volume 3 onwards). Charles L. Griswold Jr is Professor of Philosophy at Boston University. He has written extensively on ancient philosophy and German Idealism as well as on Adam Smith. He is the author of Adam Smith and the Virtues of Enlightenment (1999). His latest book is tentatively entitled Forgiveness, Apology and Reconciliation. Ryan Patrick Hanley is Assistant Professor of Political Science at Marquette University. His recent articles have appeared in History of Political Thought, The Review of Politics and The American Political Science Review, and he is currently working on his first book, a study of The Theory of Moral Sentiments. Neil Hargraves is Lecturer in History at Newbattle Abbey College, Scotland. He studied at the University of Edinburgh and has published articles in the Journal of the History of Ideas, Eighteenth-Century Life and History of European Ideas, with a forthcoming book Anthropology and the Enlightenment, to be published by Stanford University Press. He is writing a book on William Robertson. Elias L. Khalil is a Senior Lecturer at Monash University, Australia. He appreciates the support of the Konrad Lorenz Institute for Evolution and Cognition Research, Altenberg, Austria. He interested in the intersection of behavioural, institutional and organisational economics. His latest work includes Trust (2003); ‘The gift paradox’ (Review of Social Economy, 2004); and ‘What is altruism? (Journal of Economic Psychology, 2004). Catherine Labio is Associate Professor of Comparative Literature and French at Yale University. She is the author of Origins and the Enlight-

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enment: Aesthetic Epistemology from Descartes to Kant (2004) and is working on a book on literature and economics since the eighteenth century. Brendan Long is interested in the dialogue between religious thought and economics. His dissertation, ‘Adam Smith and Adam’s Sin’, is an interpretation of the religious aspects of Smith’s thought. He approaches religious questions from the perspective of Karl Rahner and Martin Heidegger. Brendan has lectured at the Australian Catholic University. Leonidas Montes is Associate Professor of Economics at Universidad Adolfo Ibáñez, Santiago, Chile. He is the author of Adam Smith in Context (2004) and co-editor (with Eric Schliesser) of New Voices on Adam Smith (2006). Jerry Z. Muller is Professor of History at the Catholic University of America in Washington, DC. His works include Adam Smith in His Time and Ours: Designing the Decent Society (1993) and The Mind and the Market: Capitalism in Modern European Thought (2002). Frederick Neuhouser is Professor of Philosophy at Barnard College, Columbia University. He is the author of Fichte’s Theory of Subjectivity (1990) and Foundations of Hegel’s Social Theory (2000) and editor of J.G. Fichte’s Foundations of Natural Right. James R. Otteson is Associate Professor of Philosophy at the University of Alabama and was recently a research associate of the Centre for the Study of Scottish Philosophy at the University of Aberdeen. He is the author of Adam Smith’s Marketplace of Life (2002). Maria Pia Paganelli is Assistant Professor of Economics at Yeshiva University, New York. David Raynor teaches philosophy at the University of Ottawa and is preparing a new edition of Hume’s letters under contract with Oxford University Press. His publications include: ‘Adam Smith: two letters to Henry Beaufoy, MP’, Scottish Journal of Political Economy, 1996, and ‘Who invented the invisible hand?’ in the Times Literary Supplement, 14 August 1998. Ian Simpson Ross is Professor Emeritus of English, The University of British Columbia, and Fellow of the Royal Society of Canada. Author of Lord Kames and the Scotland of his Day (1972), William Dunbar (1981) and The Life of Adam Smith (1995); co-editor with E.C. Mossner of The Correspondence of Adam Smith (2nd edn 1987); and editor of Contemporary Responses to Adam Smith: On the Wealth of Nations (1998). He is now preparing a second edition of the Smith biography. Christophe Salvat is Research Fellow in the CNRS (GREQAM, Marseille) and at Robinson College, Cambridge. He is currently Visiting Fellow in the Centre for History and Economics (King’s College, Cambridge). He specializes in eighteenth-century economic and philosophical thought and works currently on Rousseau.

xiv Notes on contributors Roberto Scazzieri is Professor of Economic Analysis and Deputy Director of the Institute of Advanced Study at the University of Bologna. His publications include Foundations of Economics: Structures of Inquiry and Economic Theory (1986), The Economic Theory of Structure and Change (1990), A Theory of Production: Tasks, Processes and Technical Practices (1993), Production and Economic Dynamics (1996), Incommensurability and Translation (1999), Knowledge, Social Institutions and the Division of Labour (2001), The Economics of Structural Change (2003). Eric Schliesser is a four-year VENI post-doctoral research fellow (2006–9), funded by Netherlands Organisation for Scientific Research, Department of Philosophy, Leiden University. He is also Assistant Professor of Philosophy, Syracuse University and Research Associate, Amsterdam Research Group in History and Methodology of Economics, University of Amsterdam. He has published articles on Huygens, Newton, Berkeley, David Hume, Adam Smith and contemporary methodology of economics. He is co-editor (with Leonidas Montes) of New Voices on Adam Smith (2006). Together with George Smith and Andrew Janiak he is contributing an entry on ‘Newton and Newtonianism’ for the Stanford Encyclopedia of Philosophy. Richard B. Sher is Distinguished Professor of History at New Jersey Institute of Technology and NJIT Chair of the Federated History Department of Rutgers University-Newark and NJIT. He is completing a book on Scottish authors and publishers in the Enlightenment. Craig Smith is a Lecturer in the Department of Politics at the University of Stirling and a Tutor in Politics at The University of Glasgow. Richard F. Teichgraeber III is Director of the Murphy Institute and Professor of History at Tulane University, and author of ‘Free Trade’ and Moral Philosophy: Rethinking the Sources of Adam Smith’s ‘Wealth of Nations’ (1986) and Sublime Thoughts/Penny Wisdom: Situating Emerson and Thoreau in the American Market (1995). Keith Tribe is Visiting Senior Research Fellow in History, University of Sussex and Junior Rowing Coach, The King’s School, Worcester. Current research on the international diffusion of the ‘new economics’ of the later nineteenth and early twentieth centuries. His publications include editorship of A Critical Bibliography of Adam Smith (2002). Jeffrey T. Young is the A. Barton Hepburn Professor of Economics at St Lawrence University. His research interests include the economics and moral philosophy of Adam Smith and David Hume as well as the key figures of the era of British Classical Economics. Besides journal articles, his publications include Economics as a Moral Science: The Political Economy of Adam Smith (1997).

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Introduction Smith the hedgehog Elias L. Khalil

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In Autumn 1982 I attended a seminar on Adam Smith that changed the direction of my intellectual life. The late Robert Heilbroner presided over the seminar, which took place at the Graduate Faculty of what was then called the New School for Social Research. In the seminar, I discovered Adam Smith’s The Theory of Moral Sentiments (TMS 1976a). I also discovered other important themes in Smith’s Wealth of Nations (WN 1976b) and in Smith’s other works. But it was TMS that has made, and is still making, deep contours in my thoughts. The most remarkable surprise about TMS is that it is deceptive. While it reads as though it is written by a fox, it is actually written by a hedgehog. According to the Greek poet Archilochus: ‘The fox knows many things, but the hedgehog knows one big thing’ (Archilochus 1930: 156). In his famous book-length essay, The Hedgehog and the Fox, Isaiah Berlin characterizes foxes as thinkers who ‘pursue many ends, often unrelated and even contradictory, connected, if at all, only in some de facto way, for some psychological or physiological cause’ (1953: 1). In contrast, hedgehogs are thinkers who ‘relate everything to . . . a single, universal, organizing principle in terms of which alone all that they are and say has significance’. For instance, for Berlin, Shakespeare is a fox, while Dostoyevsky is a hedgehog. It is only after one finishes reading TMS, and maybe for the second and third time, that one realizes that Smith is a hedgehog. Smith is after a unified theory of human conduct as it appears in daily human behaviour, institutions, and organizations. The unified theory or the common currency which is supposed to explain the varied and much complicated human conduct is ‘sympathy’. Given that Smith is a hedgehog, is Smith successful? Or, at least, is the common currency ‘sympathy’ robust enough to provide the much coveted unified theory of human conduct?

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4 Elias L. Khalil

I Sympathy and a unified theory of conduct With the concept of sympathy, Smith was able to distance himself from what later came to be known as utilitarian consequentialist ethics as well from deontological ethics, which later became associated with Kant. With the concept of sympathy, Smith was able to avoid the fact/value dichotomy which presupposes that human conduct and moral action are separate entities. With the concept of sympathy, Smith was able to ground social order neither on an exogenous Deity nor on axiomatic rationalist grounds. With the concept of sympathy, Smith was able to avoid what later came to be known as functionalist sociology, without reverting into the utilitarian psychology of Hobbes. And finally, with this concept he was able to account for diverse human virtues related to human welfare. These welfare-content virtues include self-interest, benevolence (altruism), justice (observation of rights of others), and prudence (observation of rights of future self). In addition, Smith advanced a particular and important virtue which he called ‘self-command’ or ‘propriety’. It is important not to confuse self-command with welfare-content virtues just mentioned. The agent achieves selfcommand when the agent moderates his emotions or appetites, that is avoids weakness of will. While self-command is not discussed here, it is sufficient to mention that it is an overarching virtue which is welfare-free. Selfcommand is rather a method or a mechanism that assures the implementation of the welfare-content virtues just mentioned (Khalil 1990). In addition, Smith discussed odious sentiments such as envy and jealousy arising from ambition and the quest after status. However, there is a problem, which has two aspects. Concerning the first aspect, sympathy is a fluid emotion or currency that can account for what economists call conduct at the margin, that is, divisible conduct. But not all conduct is divisible. Some conduct is binary – such as observance of promises (rights) and upholding sacred principles (sanctity) such as opposition to racism, war, slavery, or abortion. The question is whether Smith can, with a divisible currency such as sympathy account for binary conduct as easily as he can account for divisible conduct? Concerning the second aspect, sympathy is usually associated with amiable, prosocial dispositions. However, can sympathy still account for self-interest, on one hand, and invidious sentiments such as envy and resentment that arise from non-virtuous pursuits (ambition), on the other? Neither self-interest nor invidious sentiments seem, at first look, remotely related to sympathy. The two-aspect problem is actually multi-layered. Figure 1 attempts to provide a sketch of its multi-layered complicatedness. The bottom layer can be seen as concerned with the second aspect just discussed. At the bottom layer, we have the ‘problem of self-interest’, which is discussed below at length. It basically asks how, for Smith, self-interest relates to benevolence and how decisions are taken under different contexts or situations. At the bottom layer also, we have the ‘problem of justice’, which

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Figure 1 The general Adam Smith problem

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is ignored here. It basically asks how, for Smith, the virtue of justice relates to the virtue of prudence.1 The next layer can be seen as about the first aspect. Elastic allocation is defined as decisions that are susceptible to change gradually with the gradual change of incentives. In contrast, binary decisions are inelastic with regard to the gradual change of incentives. But the gradual change of incentives can push the agent to a ‘tipping point’ at which the agent decides either to consume or not consume a given quantity. For simplification, although somewhat different, I use the terms ‘binary’ and ‘inelastic’ interchangeably. This layer involves the ‘problem of rights’. It ultimately asks how, for Smith, binary allocations (rights) relate to elastic allocations (self-interest and benevolence). The third layer can be seen as about the second aspect. It entails the ‘problem of ambition’. It ultimately asks how, for Smith, ambition, the source of envy and resentment, relates to the virtues. The fourth layer can be seen as about the first aspect. It invites the ‘problem of sanctity’. It basically asks how, for Smith, sentiments (whether virtuous or not) relate to some inviolable principles about life (whether secular or religious). Smith would potentially be a successful hedgehog if his concept of sympathy can explain the five conducts, viz. self-interest, justice, rights, ambition, and sanctity. This symposium includes five papers that deal with four of the five conducts. The first paper by Roberto Scazzieri, ‘A Smithian theory of choice’, deals with issues that fall within the self-interest problem. The original ‘Das Adam Smith Problem’ is also about the self-interest problem. While

6 Elias L. Khalil the original version has been largely resolved in recent Smith scholarship, it still lingers in another form: how exactly can the decision-maker act prudently when choices are context-dependent – as uncovered by experimental behavioural economics? The second problematic conduct which appears to be inexplicable via sympathy is property rights. Jeffrey Young and Eric Schliesser take up this problem in their respective essays ‘Adam Smith and new institutional theories of property rights’ and ‘Articulating practices as reasons: Adam Smith on the social conditions of possibility of property’. The third problematic conduct that is, at first glance at least, inexplicable via sympathy is ambition. Ambition gives rise to odious sentiments ranging from jealousy to envy and resentment. Jean-Pierre Dupuy discusses this problem in ‘Invidious sympathy in The Theory of Moral Sentiments’. The fourth problematic conduct that is, prima facie, inexplicable via sympathy is sanctity. Sanctity is about deep, existentialist commitment to a value – such as the opposition to abortion, or the belief in a deity, or a nationalist cause. Brendan Long addresses this problem in ‘Adam Smith’s natural theology of society’.

II The problem of self-interest (PSI) The first shot challenging Adam Smith the hedgehog is the controversy surrounding the well-known ‘Das Adam Smith Problem’ which started in earnest in the second half of the nineteenth century and is still a source of debate (Oncken 1897; Montes 2004, ch. 2). This problem is about reconciliation of diverse incentives: how to reconcile self-interest, which is the focus of WN, and benevolence, which is the concern of TMS? Put differently, can one explain self-interest – regarded here as non-myopic – if one thinks that sympathy is the operative mechanism in human behaviour? Clearly, one can explain benevolence with sympathy. But this is not clearly the case with self-interest. Therefore, this dilemma is better called the ‘problem of self-interest’ (PSI). The implicit assumption behind PSI is the following definition: Definition 1: sympathy = benevolence Given the definition, it was very easy to declare ‘Das Adam Smith Problem’. But the problem vanishes if we use the following definition: Definition 2: sympathy = understanding In fact, this definition is the core of the new scholarship on Smith, initiated by the Editors of the Glasgow Edition (Introduction in Smith 1976a,b). If sympathy is understanding, the agent can as well sympathize with his own interest as he does with the interest of loved ones.

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In fact, the Editors of the Glasgow Edition actually tilted towards a functionalist, socialization account, as they tried to advance Definition 2. In their account, agents care about themselves and care about others because they are socialized by social norms to do so (see also Heilbroner 1982). On the other hand, Gary Becker (1981) offered another, alternative account that also uses Definition 2: the agent is ready to help others because he would, indirectly, boost his own utility. That is, the agent’s utility function includes the recipient’s utility. Either solution solves the ‘Das Adam Smith Problem’ understood as the problem of self-interest (PSI).2 But is this the end of the story? Once the object of one’s conduct, that is, the self or loved other, is resolved, is the decision non-problematic? Put differently, is the problem exclusively about the object of one’s conduct? According to Scazzieri (2006) in this volume, decisions concerning conduct per se are not straightforward because of the importance of framing as highlighted by the anomalies uncovered by behavioural economists and behavioural decision experimentalists in psychology. The source of the problem is not simply about who is the proper object of one’s conduct. Even to determine who is the proper object of one’s conduct, one has to take into account the context of conduct per se which is irrelevant if one adopts the view of the standard theory of choice. According to behavioural economics, agents are confronted not only with choices but also with frames or contexts that agents find relevant. Such frames or contexts complicate the choice situations and, hence, may lead to indecisiveness – not because of too much information but rather because the information is not structured adequately if one views the situation from the standard theory of choice. So, what is at issue is not the deliberation of whom to help, the self or other, which is the focus of the original PSI. Rather, what is at issue, for Scazzieri, is the choice in two complicated situations – which is even salient when the object of conduct is the self (that is, self-interest). For instance, should one spend Sunday morning exercising or should one spend Sunday morning reading The New York Times? Or, should one spend Saturday afternoon helping one’s neighbour or should one spend Saturday afternoon helping one’s brother? The problem is not the recipient of the help, but rather is that the competing choices involve, what Scazzieri calls, ‘first-order’ situations. Such first-order situations lack information that is placed in context. For Scazzieri, different social settings afford the agent different ways to interpret the same information. This is where Adam Smith’s impartial spectator is needed. The spectator is a filter or, according to Scazzieri, a ‘mapper’ that translates first-order situations into second- or, as the case necessitates, into higher-order situations. The filtering or mapping adds context to each situation that allows us to attain a higher (more general) point of view, which situates each particular state of the universe at its proper place. For instance, the impartial spectator as a mapping device may show the agent that staying healthy for

8 Elias L. Khalil the benefit of one’s future self is of higher importance than keeping up with world politics, or that the need of the brother is more important than the need of the neighbour. Such mapping allows the agent to escape indecisiveness, or what Scazzieri calls ‘rationality twists’. To avoid rationality twists, the impartial spectator adds objectivity, and such objectivity entails more information. So, what is interesting in Scazzieri’s formulation of what is called here the problem of self-interest is that difficulties in deciphering what is the most prudent act is not the result of limited brain capacity – what is called in the economic literature ‘bounded rationality’. Rather, the problem of self-interest arises from ignoring the context, which calls for a correction from the impartial spectator.

III The problem of rights (PR) Can Smith explain property rights through the concept of sympathy? As mentioned earlier,3 rights do not only include the rights of others, what Smith calls ‘virtue of justice’. It also includes the rights of future selves of the same agent. Adam Smith’s account of prudence should be seen ultimately as an account of the rights of future selves – that is, justice towards future selves. Thus, prudence is about commitments in order to prevent self-cheating. In many places, Smith discusses prudence in terms of courage and sacrifice. But the issue of courage may involve ambition, desire, and the struggle to live. These issues are beyond rights when optimum decisions are well-defined. The discussion of rights is usually dominated by justice towards others. This need not be the case. Rights can also be seen as justice towards future selves of the same person. So, rights should also cover prudence. But, following the usual practice in the literature, I restrict the discussion of rights to justice towards other persons. From the standpoint of Kantian deontologists, Smith can at best use sympathy to account for voluntary values such as the virtues of benevolence and self-interest. For Kantians, sympathy cannot account for duty, contrary to Smith’s argument. The virtues of benevolence and self-interest can be flexible with the smallest change of budgets, relative prices, or information. Thus, sympathy, which is attuned to such flexible variations, can handle these virtues. In contrast, duty entails inflexible allocation of resources. Duties, promises, and observation of rights, by definition, cannot be allowed to be elastic, that is, to bend with the minute, marginal changes of incentives. As Young (2006) shows in this volume, Smith, in a similar way to David Hume, distinguished benevolence from justice. Hume regarded justice to be an ‘artificial’ virtue, while benevolence is a ‘natural’ virtue. It is artificial because it has to be constructed in the light of self-interest. A promise made by agent A to observe the right of agent B would not usually have been made by agent A if it did not serve the interest of agent

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A. To put it differently, honesty or respect of the rights of others (justice) is the best strategy of self-interested people. On the other hand, honesty or justice is not purely a business strategy. Once rights are acknowledged, honesty or justice acquires a moral standing. Hume was not able to account for the binary characteristic of obligations, promises or rights. Adam Smith, as Schliesser (2006) demonstrates in this volume, also regarded legal rules and rights to be based on interest. But Smith also, for Schliesser, acknowledged the moral standing of justice. According to his conclusion, to justify the moral standing of justice, Smith cannot go back to pre-Newtonian, rationalist account of rights. Smith has to resort to history. Smith has to show how interactions among people, as they pursue their interests under different historical circumstances, engender ‘derived property’ rights. Such derived rights are not absolute, they depend on historical circumstances as gauged by sympathy and looking at one’s self from the station of the impartial spectator. But here is the problem which faces Smith and, more clearly, Hume, according to Young and Schliesser: while rights are the product of history and circumstances, such rights have, nonetheless, a moral standing. While rights are not absolute, they are not elastic as in the case with benevolence and self-interest. If benevolence and self-interest are elastic because of sympathy, how could we use sympathy in order to account for the relatively binary rights? To restate the problem of rights (PR), can sympathy account for rigid conduct (rights) as easily as it can account for flexible conduct (self-interest, benevolence)? According to Young and Schliesser, Smith solved PR by emphasizing the moral dimension, which accounts for the rigidity of rights – but without abandoning sympathy: we are indignant when someone’s rights are violated, even when that person is odious but has done nothing to deserve the violation of his rights. And we internalize our indignant judgment. That is, we start to try to abide by ethical rules that prevent us from hurting others. With this solution Young argues that justice is not an instrumental device. That is, justice is not designed mainly to increase welfare or avoid suboptimal situations, as has been highlighted by modern property theorists. The benefits arising from justice are to a great extent unintended by-products, and so Young extends the invisible hand argument to account for the rise of justice. With this reconstruction of Smith’s theory of justice, Young delineates between two views of the social order: one order is spontaneous and non-legislated – a view that characterizes the Scottish Enlightenment, and the other order is designed – a view that characterizes the neoclassical view of property rights. I may add that we should be careful in one regard. We should not equate Smith’s naturalist methodology with Friedrich Hayek’s evolutionary approach, as Vernon Smith does recently in his Nobel Lecture (2003). In particular, Vernon Smith calls human intentional design ‘constructivist rationality’ as opposed to unintentional design which he calls ‘ecological rationality’. Friedrich Hayek and Vernon Smith draw a sharp contrast

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between the intentional prescription of social order and the unintentional rise of social order. For Adam Smith, and as argued elsewhere (Khalil 1997), both orders are within nature. The order arising from human collective action is as natural as unintended order. For Adam Smith, the fault line is rather between two theories of order – not between two kinds of order: the theory of order as arising from processes of nature, which includes human collective action, differs from the theory of order as arising from revelation or, in secular terms, from the axiomatic method. Obviously, Smith favours the naturalist theory of explaining order – which is not the same as stating that Smith favours one kind of order over another, that is, favours the order arising from private action over the one arising from collective action. Even if agents involved in collective action appeal to revelation or the axiomatic method, it does not mean that the consequent order is artificial, unnatural, or constructivist. In fact, in their private actions, agents may also, and usually do, appeal to revelation or the axiomatic method. This does not entail that their consequent behaviour is artificial, unnatural, or constructivist. So, to state that rights and order arise naturally does not mean they are not the product of intentionality and construction. Rather, it means that they are not the product of revelation or some axiomatic principles concocted by ivory-tower philosophers. From a different disciplinary concern, Schliesser also arrives at the same conclusion, namely, that Smith regarded rights to be the product of naturalist development in the sense they are not the product of revelation or axiomatic principles. The naturalist methodology of studying morality, in Smith’s hands, and the project of the Scottish Enlightenment at large, are on a par with the scientific method, Schliesser argues. To be clear, the naturalist method understood as the scientific method should not entail crude reductionism. It merely entails that human institutions and order are best understood by referring to experiential, everyday concerns and problems rather than the application or product of some axiomatic or metaphysical principles. So, is it consistent for Smith to insist on some rights that may not be the product of historical processes? As Schliesser maintains, the right to the product of one’s own body has some perennial presence across historical circumstances. But still such perennial presence is not commanded through the axioms provided by philosophers or theologians. Rather, it is recommended through ‘station switching’, where agents identify with each other and come to sympathize with the person who suffers from injustice.

IV The problem of ambition (PA) Dupuy (2006) takes on the third problem area: can the same concept, sympathy, account for human virtues that concern welfare, on the one hand, and invidious sentiments such as envy that arise from the competition for status, wealth, fame, attention, or, in short, ambition, on the other? That

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is, how could sympathy, usually associated with amiable sentiments, account for ambition, which usually gives rise to odious sentiments? Can sympathy account for ambition? This question is the core of what is called here the ‘problem of ambition’ (PA). Smith had strong sympathies with the stoics, who expressed great misgivings about ambition. Smith regarded some pursuits based on ambition as involving self-deception, as Caroline Gerschlager (2001) records. On the other hand, Smith recognized that ambition and competition after status are necessary for social order, if not for progress itself (Montes 2004). For Dupuy, ambition understood as self-deception arises from desire. Desire makes people imitate the rich and powerful as an approximation to attaining the things that are not easily accessible to them. Dupuy exposes Smith’s study of the odious sentiments, what I may call ‘The French Adam Smith’. The French intersubjectivity school, best expressed in the pioneering work of René Girard (1976), portrays men in society as agents who are in competition for status, which usually leads to imitation, envy, and resentment (Dupuy 2004). The French intersubjectivity school also studies men in society as agents who empathize with each other’s sorrow and joys. In his essay, Dupuy recognizes fully this amiable capacity of men, what I may call ‘The English Adam Smith’ – the Smith who pays attention to the amiable and affable sentiments that inform the four virtues of self-interest, benevolence, prudence, and justice. But Dupuy and the French thinkers of the intersubjectivity school want to show one’s weakness vis-à-vis desire. It spurs one to approximate one’s desire by comparing one’s station with the station of others who are within one’s pool. It also spurs one to make others who look superior and who seem to possess something one cannot have, into gods. This yearning or displaced desire is responsible for jealousy of one’s peers who attain higher status, and maybe also responsible for envy when one realizes that one cannot attain what one wants in life. Desire may lead men to become outraged, and even resort to violence and murder, which the scholars of ‘The English Adam Smith’ have largely ignored. The French Adam Smith and the English Adam Smith, according to Dupuy, employ sympathy in the sense of mirroring. Mirroring is how agents come to see themselves in light of how they imagine others see or should see them. This ‘mirroring’ or what is known as the ‘looking-glass self’ is gaining some attention in economic theory, psychology, and neuroscience. The earliest notion of mirroring, of which I am aware, is in the early twentieth-century work of North American sociologists such as Charles Horton Cooley (1962 [1902], 1964 [1902]) and George Herbert Mead (1934, 1959, 1982; see Karier 1984; Khalil 1990). These sociologists provide what one may call a microsociological model: agents acquire their identity through the internalization of the opinions of external spectators. Agents become aware of themselves, according to this model, basically through mirroring of what others think of them.

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In their models of self-confidence and intrinsic motivation, the economists Roland Bénabou and Jean Tirole (2002, 2003) use the looking-glass self approach. The looking-glass self is gaining attention from theorists of ethics as based on cognition and mirroring (for example, Gordon 1996). Giacomo Rizzolatti and co-workers (Rizzolatti et al. 1999; Gallese, Keysers and Rizzolatti 2004) call the neural mechanisms behind empathy ‘mirror mechanisms’. Rizzolatti and Craighero (2004) appeal to Adam Smith’s notion of sympathy to illustrate their point. However, they differentiate among different mirroring mechanisms – which goes to show that ‘mirroring’, similar to Smith’s ‘sympathy’, does not necessarily entail the sociological, functionalist explanation of action. As I argue in detail elsewhere, Smith in fact rejected the microsociological, socialization view of mirroring (Khalil 1990). For Smith, the agent does not internalize actual public opinion. He rather imagines what the impartial spectator would say. As Dupuy points out in his essay, public opinion and the impartial spectator are not the same entity. The impartial spectator cannot be reduced to public opinion – although Smith did confuse them in the early editions of TMS.

V The problem of sanctity (PS) Long (2006) takes up the thorny issue of the role of religion and the deity in Adam Smith’s theory of human conduct. While TMS is full of references to the ‘Author of Nature’ and the ‘wisdom of Nature’, Smith was not concerned with the nature of the Deity, as Long explains. So, what is the ‘problem of sanctity’ (PS) in Adam Smith? Once Smith committed himself to the naturalist view of human morality, he can easily explain the sentiments. Maybe he can easily explain the amiable sentiments as well as the odious sentiments. Both can be reasoned on the basis of infinitesimal, marginal processes – which sympathy would be perfect for.4 Yet how can Smith’s concept of sympathy account for human conduct based on the sacred and inviolable – which is a conduct not based on infinitesimal, marginal processes? How could sympathy, geared for marginal substitutions, account for sanctity, which is about non-compromising imperatives? This is the origin of the problem of sanctity. In all cultures, there are taboos of all sorts, such as brutality against animals, cannibalism, mutilation of body parts, incest, abuse of corpses, and so on. They express what agents come to regard as the core of identity, the most sacred about their being as persons or communities. Conduct based on core identity is defined vis-à-vis the ‘repulsive’ or ‘profane’, a space which the agent should not even think about. For Smith, there is at least, as far as I know, one such sacred value. It is the issue of infanticide, which Young discusses. It is true that Smith makes it clear that many of the customs and values of different societies are the products of historical necessities – what is known currently as a ‘cultural relativist’ position. But Smith, on the other hand, insisted that

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history or custom should not be used to excuse infanticide. For Smith, infanticide is a horrible action: 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. (TMS V.2.15)

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Smith’s actual position is a bit more involved. On one hand, Smith wanted to criticize Plato and Aristotle for their approval of infanticide. On the other hand, he noted that a society may survive with infanticide and other horrors as long as they are kept below a critical level. He also finds infanticide excusable only when the life of a mother is imminently in danger if she keeps the child. For instance, if the mother is running away from a beast, it is obvious that one life saved (the mother) is better than two lives lost (the mother and the child). However, this qualification is only valid during an emergency. As such, the qualification should not suggest that Smith is a cultural relativist with regard to infanticide. Beyond the emergency zone, cost-benefit analysis or historical circumstance is not allowed, for Smith, to play a role in determining whether to kill the infant or not. For Smith, mere conveniences or cost-benefit analysis of sentiments – or what economists call optimization of utility at the margin – cannot justify infanticide. That is, one should not kill an infant if the cost of raising the infant is higher, at the margin, than the expected benefit, which consists of the pleasure of watching the child growing into adulthood as well as the material security that the adult would provide to the elderly parents. Smith finds any custom that sanctions infanticide on the basis of optimization (what he calls ‘conveniences’) to be perverse and horrible: 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. (TMS V.2.16) Let us analyse the sanctity of prohibition against infanticide or PS in general. The absolute objection to infanticide is universally true to any culture at any time or should be true to any culture at any time. The reason is not merely the result of some enormous sentimentality one feels towards infants. If it is about the currency of sentimentality, the overpowering sentimentality of the parents to kill the infant in order to enjoy an infantfree style of life may be equally compelling. Thus, the prohibition would

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not be a matter of sanctity to start with. Rather, Smith’s objection to infanticide stems from the premise that it is counter to the affirmation of life itself. As the quotation above states, no society can persist if it sanctions infanticide. Smith’s reasoning is not a group selection argument in the Darwinian sense. Such a Darwinian argument requires competition among groups. For Smith, even if we have one group on Earth, infanticide undermines its endurance. On the basis of Smith’s reasoning, one can establish a universal, transhistorical objection to infanticide. It is not based on sentiments. Rather, it is based on the premise that if endurance is a universal good, infanticide is abhorrent for all societies in all periods of time. For Smith, any custom that condones infanticide beyond the emergency zone is perverse. In fact, Smith’s reasoning in support of the objection to infanticide is identical to the reasoning behind the universal objection to suicide. Suicide is counter to the affirmation of life itself so that no cultural circumstances or conveniences can condone it – again, given the qualification that the choice is made beyond the emergency zone. To think about suicide as a rational choice about divisibilities might be impossible. Is it possible for an agent to decide whether to continue living or to commit suicide as the result of cost-benefit analysis? Does the question of endurance against the odds involve the evaluation of costs and benefits at the margin? If not, then the value of endurance, or the sanctity of the prohibition against suicide, is not a matter of fluid sympathy, that is, is not a matter of optimization at the margin. While Smith focuses on infanticide, he could have highlighted other sacred commitments that agents should not trade at the margin in any society at any time. I mentioned suicide. Readers may mention commitments that involve objections to slavery, homosexuality, harassments against homosexuals, adultery, sexual exploitation of children, prostitution, human organ trade, animal abuse, environmental degradation, capital punishment, incest, abortion, racism, male chauvinism, national chauvinism, and imperialism. These are visceral commitments about sanctity of something, which can be called an ‘existentialist imperative’. One may object that these sanctity issues might be existentialist imperatives to particular cultures, but not others. That is, issues such as capital punishment, abortion, or incest, are culturally specific – even when the practitioners think they should be transcultural absolutes. It might be the case that many of the existentialist imperatives are culturally specific. The problem still lingers of why agents need culturally specific existentialist imperatives? The fact that life-enhancing imperatives – such as objections to suicide and infanticide – are transcultural absolutes only highlights the gravity of the problem, called here PS. The bottom line is that there are life-enhancing sanctity values, imperative irrespective of whether they are transcultural or culturally specific, which are not based on sentiments, sympathy, or any divisible currency of cost and benefit.

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To justify sanctity values or existentialist imperatives one does not need to be monotheistic or even religious. Smith did not appeal to any loving Deity in expressing his abhorrence of infanticide when performed outside the emergency zone. So, how to justify such sanctity, what is called here PS? Can one, if at all possible, apply the fluid part of our existence (sympathy) to explain the gelled part of our existence (sanctity)? Smith can express his existentialist imperative as he likes – such as his opposition to infanticide. But is he a successful hedgehog in the sense of being able to explain sanctity in terms of sentiments? That is, can he justify existentialist imperatives per se on the ground of sympathy? One may share Smith’s abhorrence of infanticide, but argue that he failed as a hedgehog – at least in relation to the problem of sanctity. For Long, Adam Smith is a successful hedgehog with regard to PS. Long’s answer, however, reverses the question of how a loving Deity can be reconciled with sympathy and anthropological sentiments. Long provides an answer by proceeding from a totally different starting point in that, rather than assume that Smith starts with sympathy, Long argues that Smith starts with the Deity. In this manner, Long challenges the dominant, secular reading of Adam Smith and shows how sympathy or sentiments, for Smith, are material substrates which allow agents to fulfill the end goal of the loving Deity. So, Smith did not naturalize the Deity; rather Smith deified nature (Montes 2004: 37). Nonetheless, according to Long, Smith did not leave the realm of nature. Smith was still able to apply the naturalist, anthropological method, although from a starting point, not of sympathy and fluid sentiments, but the sacred or sanctity. But if sanctity, as argued before, does not necessarily entail a belief in the Deity, Long’s solution does not entail that Smith actually believed in an entity or will that is called ‘Deity’. To be precise, Smith might be shown to be a believer in such a Deity, a Christian one. Yet, does Smith need the Deity if Smith actually, as Long argues, starts with sanctity? If Long’s method teaches us anything, it is that in order to solve the problem of sanctity in the face of fluid sentiments, one does not need to appeal to the Deity. Maybe Smith did appeal to the Deity to solve PS, as Lisa Hill (2001, 2004) argues as well. But, it seems to me at least, Smith did not need to appeal to the Deity in order to solve PS. All that Smith needed, following Long’s solution, was to start with sanctity rather than with sympathy. If Long’s method is the only solution to PS, it entails a total upheaval of Smith scholarship. The entailed upheaval would not be the result, to repeat, of the trivial issue of the status of the Deity. Rather, it would be the result of portraying Smith as proto-foundationalist. That is, the entry point in TMS is not fluid sympathy, after all. The entry point is rather gelled sanctity. To propose that the impartial spectator prohibits us from violating sanctity, such as the prohibition against infanticide, is no answer to Long’s challenge. The proposition simply begs the question: what is the origin of

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the opinion of the impartial spectator? There are two possible answers – one pushes us back into PS and the other into Long’s solution. The first answer is that fluid sympathy with the infant is at the origin of the opinion of the impartial spectator. If so, the impartial spectator, to be impartial, must also sympathize with the conveniences of the parent who wants to kill the infant. Thus, the recommendation of the impartial spectator not to kill the infant must never carry the weight of absolute command that cannot (except for emergencies) be violated. This answer pushes us back into PS – how can sympathy account for sanctity? The second answer is that the origin of the opinion of the impartial spectator is sanctity itself. This is Long’s solution to PS: sympathy cannot be and should not be the entry point to understand human conduct. Smith, to be a successful hedgehog, must be proto-Kantian if he is not already. Long argues that he is already – and hence the past two centuries of scholarship got Smith wrong. If the entry point is sanctity, we should start with an impartial spectator (human or otherwise) who knows the ultimate good without referring to the actual sentiments of the actor involved. So, the impartial spectator here is not the same one that appears in Smith’s scholarship in the past two centuries. The impartial spectator here is not the result of interaction of agents and, hence, is not the mediator among competing sentiments as Smith has led us to believe in the past two centuries. In the proposed solution to PS, the impartial spectator rather precedes the actor under focus. As the actor under focus pursues the ultimate good, he may become dimly aware of it. So, the emotions or sentiments act as intermediaries: the actor strives to satisfy the sentiments and in doing so it, without being fully conscious of it, achieves the ultimate good prescribed by the impartial spectator. That is, sympathy and sentiments are second-order mechanisms, while the first-order is the hidden telos of the impartial spectator. The telos appears to everyday actors as inviolable goals or sanctity. In this construction, the sanctity starting point can either be a Deity or the secular moral imperative à la Kant. In either sense, the proto-Kantian, sanctity entry point seems to offer a solution to the PS problem. And, amazingly, it seems to offer a different interpretation of the invisible hand mechanism.5

VI Conclusion These papers attempt, from different disciplines and perspectives, to show how effective is the concept of sympathy. In doing so, they are actually arguing that Adam Smith is a successful hedgehog. The concept of sympathy, which is about caring and fluid sentiments, can explain conduct which is about self-interest and gelled institutions or rule-governed conduct. Sympathy can explain self-interest under different contexts (Scazzieri), rights (Young; Schliesser), ambition (Dupuy), and sanctity (Long). These four problems – along with the fifth one concerning justice mentioned at the outset – actually have an isomorphic structure:

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The problem of self-interest (PSI): On one hand, Smith distinguishes the appeal to one’s self-interest (the basis of the market) from the appeal to one’s benevolence. On the other hand, he uses sympathy to explain both – which may suggest difficulty if sympathy is identified with benevolence but not with self-interest. The problem of justice (PJ): On one hand, Smith distinguishes the virtue of prudence from the virtue of justice. On the other hand, he wants to use sympathy to explain both. Can he use the same explanatory variable while still maintaining that prudence and justice are different? The problem of rights (PR): On one hand, Smith wants to distinguish rights (in specific, virtue of justice) from the virtue of benevolence. On the other hand, he wants to use sympathy to explain both. But this may lead to the conflation of rights with benevolence. The problem of ambition (PA): On one hand, Smith wants to distinguish ambition, which is at the origin of rank and invidious sentiments, from the virtues, which are at the origin of amiable sentiments. On the other hand, he wants to use sympathy to explain both. However, this may suggest that there is no difference between the amiable sentiments and invidious sentiments. The problem of sanctity (PS): On one hand, Smith wants to distinguish inviolable values (such as prohibition against infanticide) from mere convenient sentiments. On the other hand, he wants to use sympathy to explain both. This may invite the suggestion that, after all, either sanctity is reducible to sentiments or vice versa.

0111 The isomorphic structure can be expressed as the ‘general Adam Smith problem’: 5

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The general Adam Smith problem: X differs from Y. Sympathy is the explanatory variable of X and Y. This entails that actually there is not a fundamental difference between X and Y. To warn, the fact that PSI, PJ, PR, PA, and PS have the same isomorphic structure should not mean that the solutions are identical. It could be argued that Smith, to be consistent, might have made a mistake in distinguishing X and Y in some sub-problems – or he actually did not distinguish X and Y. That is, the difference between X and Y is superficial in some sub-problems, as is clearly the case in PSI. On the other hand, it could be maintained that Smith, to be consistent, should have used different explanatory variables to explain X and Y – or he actually did use different

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explanatory variables. That is, sympathy simply would lead to the conflation of X and Y when there is a serious difference between them in the other sub-problems. The different authors discuss the different sub-problems from different perspectives. But all of them view Smith as a successful hedgehog.

Acknowledgements The author appreciates the fellowship support of the Konrad Lorenz Institute for Evolution and Cognition Research (Altenberg, Austria). An earlier draft benefited from the comments of Andreas Chai, Jeffrey Young, Eric Schliesser, Roberto Scazzieri, Jean-Pierre Dupuy, Brendan Long, Leonidas Montes, Caroline Gerschlager, Jack Russell Weinstein, Jonathan Wight, and Vivienne Brown. The usual caveat applies.

Notes 1

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3 4 5

Smith actually does not attempt to relate the virtue of prudence to the virtue of justice. This gap in his discussion can be called the ‘problem of justice’ (PJ): how can sympathy explain justice – when one can easily see that sympathy can explain prudence? But, to start with, how is justice related to prudence? How exactly do the rules that restrict our behavior towards others (justice) relate to the rules that restrict our behavior towards our own future selves (prudence)? Prudence entails the submission of the current self to the opinion of a dispassionate impartial spectator. Such a dispassionate spectator is actually the station occupied by the remote future self. So, the future self would be acting as a commander, telling the current self what to do in order not to undermine the interest of the future self. If the current self is left alone to dwell on its misery or passion, the interest of the future self is undermined. So, justice is the observation of rights of others, while prudence is the observation of rights of future selves – what is enforced by ‘self-command’ or ‘commitment’ (Thaler and Shefrin 1981; Schelling 1984). If this is the case, one can extend Smith’s use of ‘sympathy’ in explaining self-command in Part I of TMS to an explanation of the enforcement of prudence and justice. I think that Smith has a different theory of benevolence (altruism) than the one offered in the socialization account of Heilbroner or in the self-centered account of Becker (Khalil 1990). In fact, Becker’s account leads us to fail to distinguish the altruist from the masochist. The masochist (analogous to the altruist) sacrifices something in order to enjoy, vicariously, the pleasure of the sadist (analogous to the beneficiary) (Khalil 2004). See Note 1 above. Sympathy, which is divisible, can also explain justice, which is indivisible. While I cannot explain it here, Note 1 above suggests the outline for such an explanation. There are many different interpretations of the invisible hand in Adam Smith. None of them, though, can answer this question: why should the unintended consequences of myopic actions be desirable? The apotheosis example of the invisible hand mechanism which fascinated Smith is sexual desire. Organisms do not know consciously that sex leads to reproduction. For Smith, as I argued elsewhere, the invisible hand is about the mystery of the connection between

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the dim goal or the telos, such as reproduction, and the very explicit myopic passions, such as the sexual drive (Khalil 2002). But the mystery of the connection between the telos and the passions should not lead us to suppose that Smith was a creationist à la Paley, as Lisa Hill (2001) seems to suggest.

Bibliography

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Archilochus (1930) ‘Knowledge’ in The Oxford Book of Greek Verse, chosen (not translated) by G. Murray, C. Bailey, E.A. Barber, T.F. Higham and C.M. Bowra with an Introduction (in English) by C.M. Bowra, Oxford: Clarendon Press. Becker, G.S. (1981) ‘Altruism in the family and selfishness in the market place’, Economica, 48: 1–15. Bénabou, R. and Tirole, J. (2002) ‘Self-confidence and personal motivation’, Quarterly Journal of Economics, 117: 871–915. –––– (2003) ‘Intrinsic and extrinsic motivation’, Review of Economic Studies, 70: 489–520. Berlin, I. (1953) The Hedgehog and the Fox: An Essay on Tolstoy’s View of History, New York: Simon & Schuster. Cooley, C.H. (1962) [1902] Social Organization, New York: Schocken Books. –––– (1964) [1902] Human Nature and the Social Order, New York: Schocken Books. Dupuy, J.-P. (2004) ‘Intersubjectivity and embodiment’, Journal of Bioeconomics, 6: 275–94. –––– (2006) ‘Invidious sympathy in The Theory of Moral Sentiments’, The Adam Smith Review, 2: 98–123, V. Brown (ed.), London and New York: Routledge. Gallese, V., Keysers, C. and Rizzolatti, G. (2004) ‘A unifying view of the basis of social cognition’, Trends in Cognitive Sciences, 8: 396–403. Gerschlager, C. (2001) ‘Is (self-)deception an indispensable quality of exchange?: a new approach to Adam Smith’s concept’, in Expanding the Economic Concept of Exchange: Deception, Self-deception and Illusions, C. Gerschlager (ed.), Boston: Kluwer, pp. 27–52. Girard, R. (1976) Deceit, Desire and the Novel: Self and Other in Literary Structure, trans. Y. Freccero, Baltimore: Johns Hopkins University Press. Gordon, R. (1996) ‘Sympathy, simulation, and the impartial spectator’, in Mind and Morals: Essays on Ethics and Cognitive Science, L. May, M. Friedman and A. Clark (eds), Cambridge, MA: MIT Press, pp. 165–80. Heilbroner, R.L. (1982) ‘The socialization of the individual in Adam Smith’, History of Political Economy, 14: 427–39. Hill, L. (2001) ‘The hidden theology of Adam Smith’, European Journal of the History of Economic Thought, 8: 1–29. –––– (2004) ‘Further reflection on the “hidden theology” of Adam Smith’, European Journal of the History of Economic Thought, 11: 629–35. Karier, C.J. (1984) ‘In search of self in a moral universe: notes on George Herbert Mead’s functionalist theory of morality’, Journal of the History of Ideas, 45: 153–61. Khalil, E.L. (1990) ‘Beyond self-interest and altruism: a reconstruction of Adam Smith’s theory of human conduct’, Economics and Philosophy, 6: 255–73. –––– (1997) ‘Friedrich Hayek’s theory of spontaneous order: two problems’, Constitutional Political Economy, 8: 301–17.

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–––– (2000) ‘Beyond natural selection and divine intervention: the Lamarckian implication of Adam Smith’s invisible hand’, Journal of Evolutionary Economics 10: 373–93. –––– (2002) ‘Is Adam Smith liberal?’, Journal of Institutional and Theoretical Economics, 158: 664–94. –––– (2004) ‘What is altruism?’, Journal of Economic Psychology, 25: 97–123. –––– (2005) ‘An anatomy of authority: Adam Smith as political theorist’, Cambridge Journal of Economics, 29: 57–71. Long, B. (2006) ‘Adam Smith’s natural theology of society’, The Adam Smith Review, 2: 124–48, V. Brown (ed.), London and New York: Routledge. Montes, L. (2004) Adam Smith in Context: A Critical Reassessment of Some Central Components of His Thought, New York: Palgrave Macmillan. Mead, G.H. (1934) Mind, Self and Society, Charles W. Morris (ed.), Chicago: University of Chicago Press. –––– (1959) The Philosophy of the Present, La Salle, IL: Open Court. –––– (1982) The Individual and the Social Self, D.L. Miller (ed.), Chicago: University of Chicago Press. Oncken, A. (1897) ‘The consistency of Adam Smith’, Economic Journal, 7: 443–50. Rizzolatti, G., Fadiga, L., Fogassi, L., and Ballege, V. (1999) ‘Resonance behaviours and mirror neurons’, Archives Italiennes De Biologie, 137: 88–99. Rizzolatti, G. and Craighero, L. (2004) ‘Mirror neuron: a neurological approach to empathy’, a working paper, University of Parma, Parma, Italy. Scazzieri, R. (2006) ‘A Smithian theory of choice’, The Adam Smith Review, 2: 21–47, V. Brown (ed.), London and New York: Routledge. Schelling, T.C. (1984) ‘Self-command in practice, in policy, and in a theory of rational choice’, American Economic Review, 74: 1–11. Schliesser, E. (2006) ‘Articulating practices as reasons: Adam Smith on the social conditions of possibility of property’, The Adam Smith Review, 2: 69–97, V. Brown (ed.), London and New York: Routledge. Smith, A. (1976a) The Theory of Moral Sentiments, D.D. Raphael and A.L Macfie (eds), Oxford: Clarendon Press. –––– (1976b) An Inquiry into the Nature and Causes of the Wealth of Nations, R.H. Campbell and A.S. Skinner (eds), Oxford: Clarendon Press. Smith, V. (2003) ‘Constructivist and ecological rationality in economics’, American Economic Review, 93: 465–508. Thaler, R.H. and Shefrin, H.M. (1981) ‘An economic theory of self-control’, Journal of Political Economy, 89: 392–406. Young, J.T. (2006) ‘Adam Smith and new institutional theories of property rights’, The Adam Smith Review, 2: 48–68, V. Brown (ed.), London and New York: Routledge.

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I Introduction Smith’s analysis of human behaviour is rooted in a sophisticated theory of understanding and knowledge. In particular, Smith associates rationality (and rational deliberation) with the ability to identify a congruent setting, in which mutually acceptable reasons may be identified. Once such a congruent setting is identified, ‘Smithian’ rationality presupposes the ability to attune decisions to the structure of expectations prevailing within such an environment.1 This makes rationality itself to be context-dependent.2 In particular, rationality appears to be relative to the relational context in which human deliberation takes place. The same choices could be reasonable under some rational configurations and unreasonable under others. The aim of this paper is to analytically reconstruct and discuss Smith’s theory of deliberation under social constraints. The paper also explores implications of Smith’s theory for the analysis of choice issues that have been of special interest for economists and moral philosophers. Section II considers the conceptual structure of Smith’s theory of rational deliberation. This section examines in particular the relationship between imagination, social approbation and rational deliberation. Section III outlines a formal argument in which Smith’s theory is expressed in terms of binary structures conditional upon particular sets of situations. Section IV illustrates the ‘rationality twists’ that may be associated with statecontingent rationality once we allow for the influence of hidden situations. This section also shows that, in principle, objective standards of rationality are possible if situational constraints are appropriately identified. Rationality twists may be excluded for particular (finite) subsets of alternatives. Section V suggests that Smith’s argument could be the basis for a theory of rational choice in which conflicting values are allowed, and yet choices could be consistent with a more general (and thus more ‘objective’) standard.3 This section argues that such a standard could be recognized through the elimination of redundant social alternatives (alternatives that are not immediately responsible for the generation of conflict). Section VI brings the paper to a close by examining the alternative concepts

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of congruence that are discussed in Smith’s theory of social interaction. This section draws attention to the existence of a continuum of congruence methods (from the simple correspondence of physical motions to the matching of reflective descriptions4). It will be argued that such a continuum has a twofold implication. On the one hand, the congruence continuum suggests that Smith’s theory of fellow-feeling is related to other (and more ‘primitive’) methods of congruence. On the other hand, it highlights that fellow-feeling is sharply different from those methods, as it presupposes the existence of highly sophisticated (and rational) social actors. In particular, it will be pointed out that interaction through fellowfeeling assumes social actors capable of identifying patterns of mutual congruence by way of counterfactual reasoning, rather than through direct interaction. This section argues that Smith’s approach points to an important, yet largely unexplored, feature of co-ordination and choice.

II Deliberation under social constraints: context, social approbation and rational choice Smith’s theory of rational choice is primarily a theory of choice under social constraints. However, the action of those constraints is mediated through reflection and imagination within the agents’ minds. This makes a rational argument inherently intersubjective, and establishes a connection between rational choices and social contexts. A situation has been defined as ‘the complete state of the universe at an instant of time’ (MacCarthy and Hayes 1969, online version, p. 18).5 Smith’s theory of social situations is primarily a theory of ‘bounded’ social knowledge and behavioural beliefs. The former (social knowledge) is intertwined with agents’ natures as skilled social actors.6 The latter (behavioural beliefs) derive from situational knowledge and address interactive contexts through a type of reasoning that is akin to induction by analogy.7 The Smithian themes that are most directly relevant in this framework are the analysis of communication and contracting codes and the investigation of inferential procedures behind the formation of inductive knowledge. Important features of communication and knowledge formation may be reduced to a common set of principles concerning the discovery of connections and the treatment of unexpected occurrences (surprises). Smith’s analysis of social interaction places great emphasis upon the combined influence of imagination and sympathy. Both are rooted in a failure of direct knowledge: ‘[a]s we have no immediate experience of what other men feel, we can form no idea of the manner in which they are affected, but by conceiving what we ourselves should feel in the like situation’ (Smith 1976a [1st edn 1759], TMS I.i.1.2). The ability to consider a counterfactual set-up (imagination) is a necessary condition for the comparative assessment of social situations (social judgment). This is

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because direct knowledge never extends ‘beyond our own person’ (TMS I.i.1.2) and ‘it is by the imagination only that we can form any conception of what are [another individual’s] sensations’ (TMS I.i.1.2). We have seen that imagination is associated with the ability to conceive of possible worlds different from the actual one. This is true not only in the ordinary sense that we may attempt an assessment of another individual’s sentiments, but also in the stronger sense that the spectator could imagine another individual’s situation to be his or her own, and express on this basis her or his own independent emotions and judgment. In Smith’s view, sympathy presupposes some notion of distance. This is a necessary condition for a variety of possible worlds to be conceived.8 The ability to imagine counterfactual set-ups brings sympathy about by following a variety of routes. These may range from what we may call ‘semiotic sympathy’, to ‘subsidiary sympathy’, and finally to ‘mutual sympathy’ (or fellow-feeling). As to the first case (semiotic sympathy), sympathy is an immediate consequence of congruence (often a merely physical correspondence of feelings): Upon some occasions sympathy may seem to arise merely from the view of a certain emotion in another person. The passions, upon some occasions, may seem to be transfused from one man to another, instantaneously, and antecedent to any knowledge of what excited them in the person principally concerned. Grief and joy, for example, strongly expressed in the look and gestures of any one, at once affect the spectator with some degree of a like painful or agreeable emotion. (TMS I.i.1.6) A special instance of semiotic congruence is discussed by Smith in association with imitation and mimicry: ‘the mob, when they are gazing at a dancer on the slack rope, naturally writhe and twist and balance their own bodies, as they seem him do, and as they feel that they themselves must do if in his situation’ (TMS I.i.1.3). As to ‘subsidiary sympathy’, this is discussed by Smith when considering that sympathy may sometimes arise when the spectator, as a result of perceived social distance, is capable of a feeling of which the individual under consideration seems to be unable: ‘[w]e blush for the impudence and rudeness of another, though he himself appears to have no sense of the impropriety of his own behaviour; because we cannot help feeling with what confusion we ourselves should be covered, had we behaved in so absurd a manner’. (TMS I.i.1.10) We may now come to mutual sympathy (fellow-feeling), which marks the highest stage of social interaction: ‘nothing pleases us more than to

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observe in other men a fellow-feeling with all the emotions of our own breast; nor are we ever so much shocked as by the appearance of the contrary’ (TMS I.i.2.1). Once this stage is reached: ‘[w]e suppose ourselves the spectators of our own behaviour, and endeavour to imagine what effect it would, in this light, produce upon us. This is the only looking-glass by which we can, in some measure, with the eyes of other people, scrutinize the propriety of our own conduct’. (TMS III.1.5) Fellow-feeling presupposes a double change of situation. Individual A imagines the situation of individual B and expresses a fellow-feeling towards her joy or grief. At the same time, individual B recognizes A’s fellow-feeling and finds her grief alleviated, or her joy enlivened. However, B’s mind-set derives not so much from semiotic congruence (between the original joy or grief and A’s fellow-feeling), as from the perception that A’s fellow-feeling corresponds exactly to how she would react, were she in the same position as A. Correspondence of feelings becomes an essential element of social interaction, and is itself at the origin of a new ‘layer’ of sentiments: in general, human beings are pleased when ‘able to sympathize’ with the feelings of another human being, and distressed ‘when [they are] unable to do so’ (TMS I.i.2.6). Smith’s analysis suggests a continuum of congruence criteria based upon different stages of counterfactual reasoning (sympathy). This could be seen as a consequence of the fact that: According to Smith, conscience is a product of social relationship. Our first moral sentiments are concerned with the actions of other people. Each of us judges as a spectator and finds himself judged by spectators. Reflection upon our own conduct begins later in time and is inevitably affected by the more rudimentary experience. ‘Reflection’ is here a live metaphor, for the thought process mirrors the judgment of a hypothetical observer. (Raphael and Macfie 1976: 15) The above distinction among congruence criteria suggests that counterfactual reasoning may take a variety of routes depending upon the specific task that imagination fulfils. Semiotic sympathy requires an almost instinctive use of imaginative power; subsidiary sympathy shows the possibility of an ‘inversion’ of feelings (our consideration of the situation of another human being suggests feelings different from her own); mutual sympathy (fellow-feeling) reveals the possibility of a ‘double correspondence’ of sentiments. (The spectator shares a certain feeling by virtue of imagination exerted upon the observed individual’s situation; this latter

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finds his joy enlivened or his grief alleviated by virtue of imagination exerted upon the spectator’s view of his own situation.) Individual choice is closely associated with: (i) the ability to conceive of an appropriate space of alternatives; (ii) the ability to introduce a binary structure within such a space of alternatives. This is because choosing presupposes the consideration of rival options. And, in the words of G.L.S. Shackle, such options: are the products of [the chooser’s] original thought, his re-assembly, in configurations never realized in the field in its past, of the elements into which he resolves his basic scheme of that field. These re-assemblies can be rivals for the same stretch of time-to-come, but they must conform to the scheme of Nature and of human nature which he has evolved, [. . .] they must be possible in his judgment. (Shackle 1979: 13) The above discussion suggests that the rival options presupposed in rational choice derive from a sophisticated interplay of reasoning and communication. In particular, context-dependence concentrates individual reasoning upon a finite set of attributes. Partial similarities between individual attribute sets point to the possibility of alternatives that different individuals may be able to describe in a mutually comprehensible way. Imagination allows individuals to ‘complete’ their own descriptions of states of the universe and to introduce workable patterns of social interaction. The following section will examine the relationship between this hierarchy of situations and the possibility of consistent binary structures.9

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The logical structure of Smith’s theory of choice may be formally discussed in terms of a hierarchy of binary relations. I shall define a situation s as the (complete or incomplete) state of the universe at a given instant of time (see section II). This definition implies that any given situation si includes a fully articulated set of behavioural beliefs bi. In formal terms: bi ⊆ si. Behavioural beliefs bi are specific to situation si. In general, any given state of beliefs bi may be compatible with more than a single situation. However, any given situation includes a single set of beliefs. Smith’s theory of choice presupposes binary relations among contingent or ‘first-order’ states of the universe (states of the universe as immediately experienced by a particular individual at a given instant of time). This means that, given the set Ω of all conceivable first-order states of the universe, individuals are assumed to be skilled social actors in so far as they are assumed to be able to rank all these states (these are also the states in which their own choices are directly involved). Any given

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individual is supposed to rank first-order states in terms of behavioural beliefs that cover more than a single set of first-order states. In other words, the very possibility of ranking first-order states presupposes the ability to identify a set of ‘second-order’ beliefs. These are beliefs that individuals may reasonably apply to a multiplicity of circumstances. Second-order beliefs are assumed to be relatively persistent and homogeneous across a variety of individuals (and groups). This conceptual structure may be expressed as follows. Let us consider the universe Ω of all conceivable first-order states. Let {s1, s2, . . . , sk} be a generic and finite collection of first-order states. We assume that individuals A, B, C, . . . have immediate experience of only a limited number of collections of type {s1, s2, . . . , sk} in Ω. For any given collection {s1, s2, . . . , sk}i, the elements s1, s2, . . . , sk are alternative states of the universe as ‘immediately experienced’ by individual i (i = A, B, C, . . .). Any given individual is supposed to be able to rank first-order social states, as experienced by different individuals, by means of second-order beliefs {B1, B2, . . . , Bk}. These are beliefs associated with reflective descriptions and presuppose the individual’s ability to imagine states of the universe different from those that she immediately experiences (see note 4). The nature of second-order beliefs makes them an important element in the development of collective beliefs. For it is reasonable to conjecture that the ability to imagine virtual states (different from those directly experienced) is conducive to the communication of experiences among different individuals and to the formation of shared knowledge. Any given set of second-order beliefs covers at least a minimum set of first-order beliefs. Each individual’s ranking of first-order social states (experienced either by herself or by different individuals) is possible on the condition that the same individual has access to a set of second-order beliefs ‘congruent’ with the first-order states under consideration. The individual ranking of states presupposes the existence of a minimal encompassing belief structure. States of the universe can be compared when it is possible to introduce a binary relation between any two elements of set Ω. Given states sh and sk, their comparability presupposes that we are able to say whether sh Rsk or sh Rsk. Moral choice or economic choice are standard cases in which binary relations are involved. For example, R may denote the relation ‘be a lesser evil than’ in the case of moral judgment, or the relation ‘be more preferred than’ in the case of economic judgment. Individuals may be able to compare first-order states independently of whether they have direct experience of them or not (see above). In order to do so, they need a reference set of second-order beliefs (say, Br). For any set of second-order beliefs to be effective, the following condition has to hold Br ⊇ s1, s2. This condition suggests that effective comparisons presuppose second-order beliefs covering a sufficient number of alternative states of the universe.

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As the number of first-order states included in Br increases, so the range of feasible social comparisons is also increased. Second-order beliefs are associated with a description of second-order states. Any given secondorder state is associated with a set of first-order states. Any given set of second-order beliefs corresponds to at least one second-order social state. We cannot exclude the possibility of ‘manifold’ second-order beliefs, which would be congruent with a set of alternative second-order states. Smith’s theory of choice presupposes a particular hierarchy of situations and beliefs, such that individual first-order states (different from one subject to another) are mapped into second-order states, which could be similar across a considerable number of subjects. The criterion of the ‘impartial spectator’ may be formalised in terms of a ‘nested’ structure of individual and collective beliefs. Individual beliefs would thus correspond to descriptions of the state of the universe at any given time. Any social context conducive to effective moral (or economic) judgment is such that, for any given set of first-order states (and corresponding beliefs), there will normally be a single second-order state (and a single constellation of second-order beliefs). This may be considered a sufficient condition for the intersubjectivity of judgment presupposed in TMS. A visual representation of the relationship between individual first-order states and collective second-order beliefs is presented in Figure 2. Figure 2 illustrates the mapping from first-order individual states (s1, s2, s3) to collective beliefs and ‘back’ to individual second-order states (Sp and Sp+1). The notion of ‘mapping’ here denotes a conceptual grid allowing a particular individual to ‘map forward’ the first-order states she directly experiences, so as to ‘see’ them (via collective beliefs) as instantiations of more general, second-order states (which she, as well as other individuals, may be able to imagine). The same device can also be played in the reverse, so as to allow agents to ‘map back’ the second-order beliefs into the individual instantiations they are able to conceive. Here, it is important to note that individual states and second-order (collective) beliefs do not belong to the same level of cognition. For individual first-order states are mapped into collective beliefs, which are in turn ‘mapped back’

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into individual second-order states (that is, into individual states as seen from a social point of view). Smith’s theory of moral judgment and choice presupposes the interplay of first-order states and second-order beliefs and the ability to move across different levels of cognition. The ‘impartial spectator’ draws its effectiveness precisely from its distance relative to the first-order states to be evaluated. This is a critical and difficult point, which Smith himself, initially, could not fully understand. This is shown by the fact that, in the early editions of The Theory of Moral Sentiments, Smith ‘still retained the view that conscience begins with popular opinion’ (Raphael and Macfie 1976: 16). For example, in the second edition of TMS (1761), Smith wrote that, if we inquire into the origin (the ‘institution’) of the jurisdiction of conscience, we should acknowledge that such a jurisdiction ‘is in a great measure derived from the authority of that very tribunal [public opinion], whose decisions it so often and so justly reverses’ (TMS, variant 1761: p. 129). However, by the time of the sixth (and final) edition of TMS (1790), Smith had reached the conclusion that public opinion and the impartial spectator are based upon ‘different and distinct’ principles (TMS III.2.32).10 The above argument entails that the comparability of heterogeneous individual situations is obtained through a sophisticated ‘mirroring’ process.11 In particular, mirroring presupposes the two following fundamental properties: (i) individual first-order states generate states and beliefs of the second order; (ii) states and beliefs of the second order are ‘associated back’ with counterfactual individual states (partially but not completely different from those considered under (i)). It may be interesting to note that second-order states are concerned with relations rather than primitive states of the universe. This is because any given state of the second order may be associated with situation sets of the first order (for which it suggests a standard of evaluation). A formal expression of second-order states may thus be related with second-order logic (see Kyburg and Man Teng 2001: 144). The mapping of lower-order states into higher-order beliefs (and ‘back’ to individual second-order states) described above suggests a mirroring process in which different levels of representation are related with each other. Here, mirroring is not of the simplest ‘imitational’ kind (in which representations at the same level are involved). Multi-level mirroring presupposes an ability to distance impressions from their most immediate sources, which may be at the root of human intersubjectivity.12 We have seen that the ability to reverse the mapping from first- to second-order states is a necessary condition for moral and economic judgment (see above). However, an inverse mapping from, say, Sp into the original set of individual states is not likely to enhance social knowledge in a significant way. For in this case it will be impossible to use secondorder state Sp in the evaluation of individual states different from those initially considered. A more effective utilization of second-order state Sp

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is to ‘map forward’ Sp into a set of individual states only partially similar to the original set {s1, s2, . . . , sp}. In practice, the process described above presupposes individuals able to carry out an operation of ‘circumscription’ with respect to the attributes that are prima facie associated with first-order states of the universe. Circumscription may be defined as an operation by which ‘some particular aspects of the language, such as the domain of individuals or the extension of a predicate, are restricted so that their “coverage” is as small as possible’ (Kyburg and Man Teng 2001: 143). A classic treatment is that by John MacCarthy (1980, 1986). Circumscription has a remarkable implication for the argument of this section. For, by circumscribing different sets of first-order states, we may be able to map such different sets into the same set of second-order states. For example, first-order sets such as {s1, s2, . . . , sp}, {s1, s2, . . . , sp–1}, {sp−1, sp, sp+1} could be mapped into a set of second-order states such as {Sp−1, Sp, . . . , Sp+1}, which is only partially similar to the original sets. We may conjecture that the density of a ‘second-order intersection’ (that is, the number of states of the universe common to all first-order sets) will be directly relevant to its ‘expandability’ to a variety of new individual states. A high-density intersection is less likely to be expandable than a low-density intersection. This is because a second-order intersection including a great number of the original first-order states is associated with a presumption of completeness that is alien to low-density intersections. On the other hand, low-density intersections are more likely to be ‘incomplete’ relative to the original first-order states. Informally, a description that leaves much aside is much more flexible than a description aiming at a complete account of the state of the universe at any given time and place. This leaves room for the integration of particulars into a picture of essentials and allows a wider application of moral or economic standards. A ‘low-density’ second-order intersection consists of a small number of essential (non-dispensable) states of the universe. In this case, the epistemic criterion of partial similarity makes it easier to ‘project’ comparisons across sets of new (and partially unexplored) states of the universe.13 We may indeed conjecture that the exploration of a fast-expanding space of individual states could require a diminishing density of second-order intersections. As we face sets of states that are more and more heterogeneous (and only partially known), our ability to make effective comparisons across situations comes to depend upon our ability to identify circumscribed sets of common attributes.14 These sets provide the basis for low-density second-order intersections and make extensive comparisons feasible through induction by analogy. Smith’s theory of second-order rationality (the theory of the impartial spectator) suggests a way in which knowledge derived from the consideration of a finite number of states of the universe could be used to assess a much larger (and sometimes expanding) set of states.15 The shift from

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contingent description to general evaluation is associated with the mapping of first-order into second-order states (see above). This mapping introduces a hierarchy of states that allows individuals to move from one contingent evaluation to another via a given set of general principles. This hierarchy of states allows individuals to distance themselves from contingent descriptions, induces them to ‘draw out’ essential common attributes from a set of heterogeneous individual states and enables them to evaluate new individual states (on the basis of the above set of essential attributes). The binary structure of rational evaluation (and rational choice) presupposes a ‘shifting criterion’, which allows the mapping from the set of first-order states into a smaller set of second-order states. In the absence of such a mapping, the (consistent) binary structure of rational choice might disappear altogether. For we may find individuals unable to say whether sh Rsk or sk Rsh. The ability to conceive of second-order states allows individuals to use generalized binary structures, and to make rational choices, even if they might be unable to conceive of binary structures solely in terms of firstorder states. The reason is that not all first-order states are directly comparable (as a first-order binary structure would require). However, they could become indirectly comparable, after first-order states are mapped into second-order states. In general, second-order states allow more general binary structures than first-order states inasmuch as they are associated with circumscribed descriptions. This makes the prerequisite of general comparability less demanding (and increasingly so as one moves to secondorder intersections of diminishing density16). Smith’s distinction between two different levels of moral evaluation (respectively associated with the ‘man without’ and the ‘man within’) may be considered in the light of our distinction between states of a different order: the all-wise Author of Nature has [. . .] taught man to respect the sentiments and judgments of his brethren; to be more or less pleased when they approve of his conduct, and to be more or less hurt when they disapprove of it [. . .] But though man has, in this manner, been rendered the immediate judge of mankind, he has been rendered so only in the first instance; and an appeal lies from his sentence to a much higher tribunal, to the tribunal of their own consciences, to that of the supposed impartial and well-informed spectator, to that of the man within the breast, the great judge and arbiter of their conduct. (TMS III.2.31–32) The ‘man without’ and the ‘man within’ operate through distinct (although related) logical principles:

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[t]he jurisdiction of the man without, is founded altogether in the desire of actual praise, and in the aversion to actual blame. The jurisdiction of the man within, is founded altogether in the desire of praise-worthiness, and in the aversion to blame-worthiness. (TMS III.2.32) Smith’s theory of morals (as expressed in the previous passage) derives precisely from the human ability to distinguish between first- and higherorder situations.17

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First-order comparisons of states are decidedly contingent. They may also be ephemeral when they are associated with descriptions of states of the universe that are ‘too rich’ in terms of secondary attributes and circumstances (see also section III). On the other hand, higher-order states could be more persistent, if they are associated with increasingly smaller collections of essential attributes. For example, the same action could be praised or blamed depending upon its context (first-order situation). Lying is normally blamed, but it may sometimes be considered as morally acceptable or praiseworthy (when, for instance, it is required to protect people’s lives). In this case, Smith suggests the need for a high-level argument, in which contexts are carefully differentiated and a comparison of alternatives (across first-order states) may be attempted. In our example, context differentiation allows a rational subject to ‘lift’ herself (or himself) above the ambiguity of first-order states, and makes him (her) able to take a moral stance. Information derived from contexts makes subjects able to move beyond contexts. For example, knowledge of the specific conditions and consequences of lying may allow subjects to rank states of the world that would otherwise be non-comparable. The reason for this is that description of contexts expands the original description of states of the world (‘lying’ versus ‘non-lying’). It is precisely such an expansion that allows the ranking of contingent states after suitable circumscription. The hierarchy of binary structures examined above suggests that contingent (and, possibly, contradictory) choices could make room for increasingly persistent (and consistent) choices as long as the prerequisite of diminishing density of second-order intersections is satisfied. This conceptual framework makes it possible to envisage the possibility of ‘rationality twists’ when individuals (or social groups) move from one particular set of states to another. For example, attitudes to risk may give rise to opposite patterns of choice depending on the way in which the same alternatives are presented (see Kahneman and Tversky 1979a, 1979b and 2000). Or, changes in the choice menu may lead agents to treat given situations differently (as they move from one choice menu to another) (Sen 2002a: 165–75). A simple illustration of this possibility may be provided as

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follows. Let us examine the following first-order sets: {s1, s2, . . . , sp}, {s1, s2, . . . , sp–1}, {sp–1, sp, . . . , sp+1}.18 It could happen that any given individual is able to generate a complete binary structure within each particular set, but that such a binary structure is liable to change when there is a shift from one set to another. For example, it could be that s1 Rs2, with the binary structure associated with the set {s1, s2, . . . , sp}, and that s2 Rs1 with the binary structure associated with the set {s1, s2, . . . , sp–1}. If that is the case, we may think that a ‘rationality twist’ has taken place. This is because the same social states give rise to different binary structures as a result of the different set (situation) in which they are evaluated.19 Important examples are the cases of ‘chooser dependence’ and ‘menu dependence’ (of choice acts) discussed by Amartya Sen: Some types of influences of choice acts are more easily to formalize than others, and these include: (i) chooser dependence, and (ii) menu dependence. Consider the preference relation Pi of person i as being conditional on the chooser j and the set S from which the choice is being made Pij,S. Chooser dependence and menu dependence relate to the parametric variability of Pi with j and S respectively. (Sen 2002a: 166–7) Rationality twists warn us about the contingent character of first-order binary structures. However, the possibility to map first-order into secondorder states (see above) suggests that, under certain conditions, rationality twists may be removed. This could happen if second-order intersections are generated from the collection of all sets of first-order states in an appropriately circumscribed way. In a way, Smith’s definition of the impartial spectator as the ‘man within’ (distinct from the ‘man without’ of public opinion) may be considered as an attempt to meet the logical requirements for mapping first-order into second-order states. The impartial spectator as the ‘man within’ makes reference to benchmark criteria (‘praise-worthiness’ and ‘blame-worthiness’) that are independent of specific cases of ‘actual praise’ or ‘actual blame’ (see also Note 17). In practice, the mapping from first-order to secondorder states should be able to operate as a filter eliminating the ‘situational noise’ associated with first-order comparisons. Smith’s ‘man within’ is supposed to achieve precisely that. For, differently from the ‘man without’ (public opinion), the perfect impartial spectator raises himself (herself) above contingent evaluation, and achieves a kind of positional objectivity derived from a carefully constructed ‘view from nowhere’ (Sen 2002b: 467; Nagel 1986: 5).20 The ‘man within’ is a cognitive device turned into a moral criterion. This means that, in Smith’s view, moral judgement can be attained through the development of reason into a concrete faculty for differentiating among prima facie indistinguishable cases and generalizing from partial

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similarities. On the basis of such a faculty, rationality twists may be avoided if second-order states are built by selecting, from each first-order set, only the elements (social states) that are unambiguously associated with that particular set. This means that first-order states such as sp and sp–1 are likely to be included in the second-order intersection (as the ‘last characteristic’ element of each first-order set), whereas s1 and s2 are not likely to be included (as states common to both sets, and thus not directly relevant if we wish to focus upon the most distinctive elements of each set). The mapping from first-order to higher-order states makes it possible to remove the least distinctive elements of any given situation set (see above). We may then identify second-order intersections by selecting the most distinctive element(s) in each set. For example, any given secondorder intersection will include a description of what makes the first-order binary structure associated with situation set {s1, s2, . . . , sp} different from the first-order binary structure associated with situation set {s1, s2, . . . , sp–1}. We may expect that rationality twists could be gradually removed as we switch from lower- to higher-order situations. This is because the higher-order situations will be constructed precisely by circumscribing the most distinctive elements of each situation set (see above). In this way, lower-order binary structures (in which rationality twists are possible) are substituted by higher-order binary structures (in which those rationality twists are explicitly removed). Smith’s discussion of the multiple layers of moral judgement in Stoic philosophy is an instance of the role that a hierarchy of binary structures can play. For Smith argues that practical morality reflects ‘imperfect virtues’, that is, virtues such as ‘not rectitudes, but proprieties, fitnesses, decent and becoming actions, for which a plausible or probable reason could be assigned’ (TMS VII.ii.1.42). It is primarily in connection with those imperfect virtues that the ‘real or even the imaginary presence of the impartial spectator’ is to be assessed. For, in the ordinary course of life, ‘the authority of the man within the breast, is always at hand to overawe [human passions] into the proper tone and temper of moderation’ (TMS VII.ii.1.44). In terms of the present analytical framework, the solution of moral dilemmas in ordinary life presupposes a (rather common) ability to map first-order order states into second-order order states, in which individuals are able to attain a context-dependent ‘view from nowhere’. However, there may be personal circumstances in which all events ‘turn out the most unfortunate and disastrous’ (TMS VII.ii.1.45). In such cases, individuals may be able to find consolation not only from the impartial spectator but also from the ability to ‘move up’ to moral situations of an even higher order. In this case, Smith acknowledges, the most general principles of Stoic philosophy may become immediately relevant: consolation may be drawn, not only from the complete approbation of the man within the breast, but, if possible, from a still nobler and

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In short, contingent binary structures could be at the root of ‘lowerorder’ rationality. Rational choices are more likely to be subject to the rationality twists described above, the more they are associated with lowerorder situations. On the other hand, it is in the nature of higher-order situations that the distinctive features of lower-order situations are highlighted. This point of view is at the root of the ‘Stoic moral hierarchy’ at the core of Smith’s moral philosophy (Brown 1994: 76–99). Individuals who are capable of examining first-order states through the ‘looking glass’ of a second-order state are normally uninterested in the most common attributes of the former. We meet here the apparent paradox that ‘universal’ binary structures are more likely when distinctive features are explicitly emphasized. The reason for this is that the circumscription of distinctive features removes latent influences upon comparative judgment and makes a more general (or ‘objective’) standpoint more likely.21 To conclude, circumscription appears to be a necessary condition for the scrutiny of rationality twists. This is because circumscription could bring to light the most distinctive elements of each situation set, and thus remove rationality twists (between lower-order states) by means of a second-order binary structure. Informally, effective circumscription pinpoints the most specific feature of each situation set and makes the chooser aware of influences that might otherwise act upon her in a latent way. Smith’s discussion of the so-called ‘paradox of value’ is a case in point. The fullest account of this paradox is to be found in the Lectures on Jurisprudence (LJ): Thus we see that water, which is absolutely necessary for the support of mankind, by its abundance costs nothing but the uptaking, whereas diamonds and other jewels, of which one can hardly say what they serve for, give an immense price [. . .] Man alone of all animalls on this globe is the only one who regards the differences of things which no way affect their real substance or give them no superior advantage in supplying the wants of nature. Even colour, the most flimsy and superficiall of all distinctions, becomes an object of his regard. Hence it is that diamonds, rubys, saphires, emerallds and other jewels have at all times been distinguished from the more pebbles of less splendid hues. (LJ vi.8, 13; my emphasis) It is clear from Smith’s argument that differences are critical to the existence of the paradox of value and to its solution. If differences between

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choice situations were not detected, common behavioural patterns would appear to be irrational. However, it is precisely the human ability to describe prima facie homogeneous items as different items that turns the paradox of value into a fully rational argument. It may be rational for certain people to pay more for a different colour as long as their own description of the relevant choice situation takes colour differences into account. It could thus happen that a diamond is indifferent to a ruby in a ‘savage nation’, whereas the same diamond might be preferred to the same ruby in a more civilised state of humankind. Here Smith’s account would be that, in the latter situation, human beings are able to see a difference that had previously passed unnoticed. The removal of rationality twists by circumscription may be illustrated by considering the following first-order situation sets: {s1, s2, . . . , sp}, {s1, s2, . . . , sp–1}, {sp–1, sp, sp+1}. In each situation set, the bold type symbol denotes what I have called the ‘most distinctive element’ (in this case, the ‘last element’ of the corresponding set). Rationality twists are possible if, for example, s1 Rs2 in situation set {s1, s2, . . . , sp}, but s2 Rs1 in situation set {s1, s2, . . . , sp–1} (see above). The construction of a second-order situation may proceed as follows. Circumscription reduces the number of first-order states to the ‘most distinctive’ state in each set. This leads to the following second-order situation set: {Sp–1, Sp, Sp+1}. We may conjecture that, if it is possible to introduce a binary structure corresponding to the second-order situation set {Sp–1, Sp, Sp+1}, such a binary structure will be immune from the first-order rationality twists described above. This is because we have assumed that rationality twists were due to the latent influence of the ‘most distinctive’ element in each situation set. However, new twists could appear in case we introduce a multiplicity of second-order situation sets. In this case, further use of circumscription might allow us to get binary structures immune from contradiction.

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The above argument has led us to recognize that conflicts often arise from the latent influence of elements not directly involved in comparative judgment (but nonetheless present in the situation set under consideration). We may now explore whether the shift from lower- to higher-order situations may be of help in conflict solution. Conflicting values are often associated with alternative descriptions of the state of the universe. This is shown by the fact that, when comparing situation sets {s1, s2, . . . , sp} and {s1, s2, . . . , sp–1}, the rationality twist between states s1 and s2 is associated with the existence of different ‘last elements’ in the two sets (see above). We may conjecture that, by circumscribing our description of possible states of the universe precisely to those two states (sp–1 and sp), a non-contradictory binary structure (of the

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second-order type) may be generated. Once first order latent external influences are removed, it would be reasonable to assume (unless we have indifferent alternatives) that either Sp–1 RSp or Sp RSp–1. However, we are not entitled to assume that, by this means, the possibility of all conflicting judgments will be taken away. For it may still be possible that for certain individuals Sp–1 RSp and for other individuals Sp RSp–1. However, the conflict of values would be reduced to its primary components. We may expect that, in many circumstances, individuals who are unable to agree when faced with first-order states s1 and s2 would find it possible to agree once circumscription has allowed them to identify the ‘most distinctive’ first order elements of their respective situation sets (sp–1 and sp) and has reduced their choice to the corresponding second-order states Sp–1 and Sp. In some other cases, agreement will be impossible, except in the special form of ‘agreeing to disagree’ (Aumann 1976). In such cases too, further circumscription may allow individuals to detect ‘higher-order’ sources of disagreement and bring about a non-contradictory binary structure (see below). The source of agreement reached through the circumscription of possible alternatives is worth further exploration. In this case, agreement is more likely when individuals are able to reduce the density of second-order intersections to a small number of essential states of the universe. States of the universe that are not directly responsible for (first-order) rationality twists are dropped, and individuals concentrate attention upon the states of the universe that are ultimately responsible for the lack of consistency between different situation sets. This means that disagreement between, say, individual A and individual B as to whether sp–1 Rsp or sp Rsp–1 is reduced to the difference in the situation set considered by A relative to the situation set considered by B. Awareness of that difference amounts to circumscription of first-order sets, and their reduction to the secondorder set {Sp–1, Sp}. This set narrows down the original states of the universe to those responsible for the different points of view taken by individuals A and B when considering first-order states. A completely transparent second-order set would normally be associated with a consistent binary structure. This means that, if the second-order set is complete and there are no ‘hidden’ situations influencing the binary structure, we may expect Sp–1 R Sp or Sp RSp-1 for both A and B. Cases in which this is not true point to the existence of hidden second-order situations, which may be different for A and B. For example, it could be that A’s binary structure is subject to the second-order set {Sp–1, Sp, Sp+1}, whereas B’s binary structure is subject to the second-order set {Sp–1, Sp, Sp+1, Sp+2}. The ‘last elements’ of the two situation sets are different (Sp+1 and Sp+2 respectively). This may explain the different binary structures held by the two individuals. In this case too, circumscription may be relevant in removing redundant situations and generating a consistent binary structure across individuals. The circumscribed set {Sp+1, Sp+2} may be such that either Sp+1 R Sp+2, or Sp+2 RSp+1, but not both hold true.22

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Conflicting values are often associated with a partial description of relevant states of the universe. The previous argument has shown that ‘hidden’ alternatives may generate inconsistent binary structures. The Smithian criterion of the impartial spectator suggests that consistent binary structures may be identified through the consideration of second-order states of the universe. These are situations derived from first-order states of the universe but circumscribing those states to the situations that ‘make a difference’ for the consistency of binary structures. Once the mapping from first- to second-order situations is introduced, we may find that, given any two alternative states Sh and Sk, either Sh RSk, or Sk RSh holds true.23 It is worth noting that, in this case, the consistency of binary structure derives from the adoption of a particular standpoint (the standpoint of an impartial spectator able to take a ‘distant view’, and to generate a fully consistent ranking of alternatives). Circumscription of first-order situations is not always sufficient to generate a consistent binary structure. In this case, the cognitive device of the impartial spectator suggests that we take further steps into circumscription, and that we introduce sets of third- or higher-order situations. In principle, circumscription may eventually attain a stage at which no hidden states of the universe are left, so that, for any given set of states, we will be able to remove rationality twists. This implies that, for any given pair of rational individuals A and B, iteration of circumscription may take away the reasons for conflict. The above proposition presupposes a common human nature and derives from the idea that individuals are bound to take the same view of any given set of alternatives if their situation is the same. In many situations, however, individuals are associated with ‘plural delineations’, so that ‘alternative identities can compete for relevance, even in a given context’ (Sen 1999: 15). Smith’s framework suggests that adequate reasoning may allow individuals to overcome plural delineations and to attain (through the impartial spectator) an understanding of heterogeneous identities and standpoints. Of course, this is possible insofar as individuals are able to approximate the impartial spectator’s standpoint.24 This may prove to be difficult or unfeasible if too many hidden alternatives influence comparative judgment at the different stages of circumscription.

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This paper has examined Smith’s theory of rational choice in terms of the conceptual structure outlined in his Theory of Moral Sentiments. In particular, we have considered Smith’s conception of ‘situational’ rational choice (choice inherently associated with a particular point of view). In spite of its situational character, rational choice for Smith is not arbitrary or idiosyncratic. For rationality presupposes the ability to move from

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first-order states (the direct content of human individual experience) to higher-order states. (These situations are not directly experienced, but may be indirectly ‘shared’ by a variety of individuals through reflection.) Smith’s conception of the ‘man within’ (the impartial spectator) suggests that a suitable hierarchy of states could generate consistent binary structures. Partial similarity may be used to connect the different stages of the process leading to the identification of common ‘mirroring’ situations.25 Following this route, we have been able to recognize a continuum of congruence methods, which may range from the physical correspondence of motions to the ‘reflective’ correspondence of higher-order beliefs.26,27 In short, Smith’s theory of choice (as outlined in TMS) is an especially effective instantiation of a general cognitive faculty, that is, of the invention of connecting principles ‘which sort phenomena into categories and link these categories in an explanation which is sufficient to “sooth[e] the imagination”’ (Loasby 2002: 1231).28 More specifically, the connecting principles discovered by the impartial spectator (through circumscription) presuppose a mirroring faculty that makes both social knowledge and social co-ordination possible.29 Both mirroring and circumscription describe how agents deliberate under social constraints and are essential to a choice-theoretic framework explaining the possibility and working of social congruence. In particular, high-level rational choices point to the logical possibility of social congruence as a type of (deliberate) ‘reflective equilibrium’.30 We have seen that circumscription may be used to move from states of a given order to states of a higher order. In particular, circumscription has allowed us to derive higher-order situations from the set of the ‘most distinctive’ social states of the immediately preceding order. For example, the domain of second-order situations may be constructed from first-order situations by removing first-order states that are common to all situation sets. In this way, second-order situations allow individuals to concentrate upon the most significant differences among situations of the first order (such as immediate experiences). A perfect impartial spectator should be able to remove all unnecessary states of the universe, and thereby concentrate upon the most restricted domain for ‘positional inversion’. (This is of course the central cognitive operation in Smith’s theory.) It is sometimes necessary to carry out circumscription and positional inversion more than once. For example, second-order states are not always sufficient to remove hidden positional differences (see section IV). In this case, circumscription may be applied to second-order situations in order to obtain a more restricted domain for third-order situations (and so on, if further circumscriptions are necessary). In general, the ‘perfect’ impartial spectator is more likely at higher stages of circumscription, than at any lower stage. However, this presupposes that individuals be able to identify an increasingly smaller set of distinctive features as they move from lower to higher stages. It is reasonable to conjecture that distinctive features would be more and more difficult

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to detect as we move up from one level of circumscription to the next. At the same time, positional inversion is conceivably easier as the set of alternative positions gets smaller. On these premises, a perfect impartial spectator is likely to emerge if we assume that individuals are sufficiently capable from the cognitive point of view. The above analytical set-up has interesting implications in a variety of fields. In particular, conflicting values could be tackled as cases in which a ‘perfect’ impartial spectator has not yet been found (see section V). Here, iteration of circumscription would in principle allow conflict solution, provided individuals are capable of ‘isolating’ the hidden situational differences that make universal binary structures difficult to achieve. To conclude, a situational theory of choice (as suggested by Smith’s analysis of the impartial spectator) points to a possible heuristics of binary structures.31 Counterfactual reasoning, when applied to the diversity of social situations, makes social congruence feasible if and only if individuals are able to identify the appropriate circumscriptions of situation sets. In general, different contexts require different circumscriptions, even if the need to circumscribe situation sets and to carry out positional inversion is common to all cases in which the impartial spectator is assumed. This suggests an important connection between co-ordination and internal reasoning, and highlights that internal reasoning is not necessarily associated with actual or expected communication and interaction.

Acknowledgement

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This paper was written while the author was a Visiting Fellow at the Centre for Research in the Arts, Social Sciences and Humanities (CRASSH), University of Cambridge. The author is grateful to two anonymous referees, to the Guest Editor Elias Khalil and to the Editor Vivienne Brown for their careful reading and insightful suggestions. The usual caveat applies.

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1 This point of view provides a unifying conceptual thread between the cognitive (and moral) structures discussed in Smith’s TMS (1976a) and the co-ordination structures considered in his Wealth of Nations (1976b). This relationship between moral structures and co-ordination structures is apparently close to F.A. Hayek’s emphasis upon the congruence between individual knowledge and social knowledge (see, for example, Hayek 1979: 155–6). Hayek, however, insisted that congruence is often as immediate as ‘individual events’, as it may be apprehended ‘without having to resort to intellectual operations’ (Hayek 1967: 23). He also pointed out that social congruence is characterised by a ‘higher degree of complexity than is possessed by the objects it classified’ (Hayek 1952: 185). This point of view may be one important reason for the human ability ‘to act according to rules, which [the individual] may be unable to express in words, but which can only be described by formulating rules’ (Hayek 1978: 7). Smith’s theory of the consilience between the human mind and the process of social co-ordination

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Roberto Scazzieri is different from that of Hayek primarily because Smith insists upon the possibility of deliberate judgment beyond a certain stage in the development of social knowledge. In particular, Smith’s distinction between mimicry and fellow-feeling points to the existence of alternative mental processes by which social coordination may be achieved (see section II). Smith calls attention to the role of situation in determining the space of mental representations, and thus the pattern of reasoning of rational individuals. This means that the actual deliberation (choice) reflects context principally because the latter may significantly affect the representation of problem spaces and the identification of rational standards. For the purpose of the present analysis, conflicting values are associated with conflicting rankings of the same social states. A reflective description is one in which individual A describes (or imagines) the actual situation of individual B as a virtual situation of A, and vice versa (see also section II). The above general definition is consistent with F. Giunchiglia’s view of context as the ‘local theory’ relevant for the solution of a specific cognitive problem (or set of problems) (Giunchiglia 1993). This makes context to be the current state of a pragmatic representation. The implications of this point of view for the analysis of economic behaviour are discussed in Khalil (2003). This means that social knowledge is neither acquired through learning from an uncertain environment, nor is it derived from prior sources such as a fixed identity fully specified before interaction. In this connection, it may be interesting to recall John Maynard Keynes’s analysis of the association between analogy and likeness in his Treatise on Probability: In an inductive argument we start with a number of instances similar in some respects AB, dissimilar in others C. We pick out one or more respects A in which the instances are similar, we argue that some of the other respects B in which they are also similar are likely to be associated with the characteristics A in other unnamed cases. The more comprehensive the essential characteristics A, the greater the variety amongst the non-essential characteristics, and the less comprehensive the characteristics B which we seek to associate with A, the stronger is the likelihood or probability of the generalisation we seek to establish. (J.M. Keynes 1921: 219–20) One important feature of analogy is its selective nature. Analogy presupposes partial likeness, and is seldom associated with a comprehensive evaluation of alternatives (Scazzieri 2001a: 127). It may be interesting to note that the discovery of partial likeness is related with the identification of patterns, that is, of connecting principles by which human experience can be organized and interpreted. This suggests a link between pattern identification and the associative networks theory of meaning, according to which ‘concepts (or arguments) are nodes in a network, and the relationships (between them) are specified by links’ (Hardy 1998: 12; see also Suppes, Pavel and Falmagne 1994). Smith’s view of social knowledge is rooted in a sophisticated theory of perception, which brings it close to Hayek (see Note 1). However, Smith is also aware of the multiple dimensions of perception (from mimicry to fellow-feeling) and emphasizes the role of deliberate reasoning behind social co-ordination and moral evaluation.

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8 Distance and diversity are at the root of the concept of an ‘impartial spectator’, as originally introduced by Joseph Addison: ‘I should not act the Part of an impartial Spectator, if I dedicated the following Papers to one who is not of the most consummate and most acknowledged Merit’ (Addison 1724: i–ii). In the first issue of The Spectator (1 March 1711), Addison writes: I live in the World rather as a Spectator of Mankind, than as one of the Species, by which Means I have made myself a Speculative Statesman, Soldier, Merchant and Artizan, without ever meddling with any Practical Part in Life. I am very well versed in the Theory of a Husband or a Father, and can discern the Errors in the Oeconomy, Business and Diversion of others, better than those who are engaged in them; as Standers-by discover Blots, which are apt to escape those who are in the Game. (Addison 1724: 5–6) Diversity and distance are also essential to the working of sympathy as a connecting principle. In this respect, L. Bagolini noted that ‘the prerequisites of sympathy, precisely as a “connecting principle”, are the diversity and contrasts of the human situations upon which sympathetic judgments can be applied’ (Bagolini 1975: 153; my emphasis). For a discussion of the relationship between connecting principles in inductive knowledge and social co-ordination, see also Porta and Scazzieri (2001, 2003). 9 Michael Bacharach suggests that social interaction presupposes ‘intuitive capacities to interpret others’ (Bacharach 1989: 135). He also suggests that such capacities ‘resemble practical knowledge, such as knowing how to play a piano piece without the music, or when it is safe to overtake’ (Bacharach 1989: 135). Smith’s analysis of the role of situations in social interaction highlights the existence of a hierarchy of interpretative capacities. Such capacities range from the intuitive structure of what I have called semiotic sympathy to the highly reflective structure of fellow-feeling. 10 The reason is that, according to Smith: [T]he jurisdiction of the man within [the impartial spectator], is founded altogether in the desire of praise-worthiness, and in the aversion to blameworthiness; in the desire of possessing those qualities, and performing those actions, which we love and admire in other people; and in the dread of possessing those qualities, and performing those actions, which we hate and despise in other people [. . .]. If [. . .] the man without [public opinion] should reproach us, either for actions which we never performed, or for motives which had no influence upon those which we may have performed; the man within may immediately correct this false judgment, and assure us, that we are by no means the proper objects of that censure which has so unjustly been bestowed upon us. (TMS III.2.32)

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Smith, however, was also aware that the ‘man within’ is sometimes distant from a truly impartial spectator. This could happen when

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[t]he violence and loudness, with which blame is sometimes poured out upon us, seems to stupify and benumb our natural sense of praise-worthiness and blame-worthiness; and the judgments of the man within, though not, perhaps, absolutely altered or perverted, are, however, so much shaken in the steadiness and firmness of their decision, that their natural effect,

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Raphael and Macfie give a detailed account of the changes in Smith’s view of the impartial spectator from the first (1759) to the final (1790) edition of TMS (Raphael and Macfie 1976: 16). (See also Macfie 1967, Bagolini 1975, Skinner 1996.) Mirroring may be one important reason behind Smith’s derivation of self-interest from gift exchanges, through the circumscription of co-ordination outcomes among traders who are ‘already friends and neighbours’ (Young 2001: 101). Recent developments in the study of ‘mirror neurons’ have called attention to the role of distant impressions in the activation of neural associations. (See Rizzolatti and Gallese 2002, for presentation of this finding in neuroscience and discussion of its implications in a wider field; see also Gallese, Ferrari and Umiltà 2002, Khalil 2002). For a discussion of partial similarity in relation with social knowledge and coordination, see Scazzieri (2001a, 2001b). It is worth noting that the process by which circumscription derives a conclusion from a theory is non-monotonic, as such a conclusion ‘is not necessarily retained in the theory obtained by circumscribing an expanded theory’ (Kyburg and Man Teng 2001: 145). This non-monotonicity allows radically different conclusions as we move from one stage of circumscription to another (see the discussion of rationality twists and their removal in sections IV and V). There is a prima facie resemblance between Smith’s point of view (as reconstructed above) and F.A. Hayek’s attempt to identify a second-order cognitive ability. Such an ability finds its expression in the ‘capacity of understanding’ the meaning of other people’s utterances and actions ‘in a manner in which we cannot understand physical events’ (Hayek 1973: 8; author’s emphasis). However, Smith’s analysis of second-order beliefs suggests a different approach to social congruence. In particular, the higher stages of social knowledge are, according to Smith, the result of a sophisticated process of reasoning, which makes them deliberate and keeps them distant from simple imitation and popular opinion. This is clearly shown by Smith’s gradual distancing from his original interpretation of the impartial spectator (as expressed in the early editions of TMS), and from his final conclusion that public opinion and the impartial spectator are based upon ‘different and distinct’ principles (TMS III.2.32). Circumscription of lower-order situations allows the impartial spectator to subsume those situations under more general descriptions. In short, circumscription is close to Kant’s and Hayek’s idea of ‘understanding’ as the application of a system of abstract rules to particular objects (see also Kukathas 1990: 51–2). However (and differently from Kant and Hayek), Smith’s impartial spectator exercises her (his) judgment in full awareness of the rational constraints upon circumscription and the formation of social knowledge. Intersections of diminishing density are associated with increasingly smaller sets of essential attributes. This reduces the informational prerequisites of binary structures, and makes second-order binary structures feasible even in cases when first-order structures are not. It may be interesting to note that philosophical interest in this cognitive faculty may be related to attention for moral paradoxes in English eighteenth-century literature. In this connection, Edmund Leites has pointed out that collections of ‘letters of advice’ addressed to people faced with moral dilemmas (Defoe,

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Richardson) had their roots in the seventeenth-century discussion of double doubt (the doubt arising in a situation in which there is ‘reason to think that the same act [is] both required and forbidden’ (Leites 1988: 126). 18 For the sake of simplicity, we shall assume that each situation is completely identified by a collection of states independently of beliefs. 19 Alternative contexts may be generated by the existence of different descriptions of the same alternatives (that is, by different frames). This duality has been examined by Amartya Sen, who distinguishes between ‘[t]he influence of “framing” [. . .] when essentially the same decision is presented in different ways’ and ‘a real variation of the decision problem, when a change of the menu from which a choice is to be made makes a material difference’ (Sen 2002a: 168n). For a general discussion of frames in relation to social knowledge and co-operation, see also Turner (2001) and Scazzieri (2003b). 20 Amartya Sen maintains that the positional objectivity of any given observation from a certain observer ‘relates to the fact that it is possible to check whether such an observation could be reproduced by others if placed in a similar position’ (Sen 1993, 2002b: 467). Smith’s ‘man within’ is an attempt to achieve what Sen calls ‘trans-positional assessment’ (Sen 2002b: 467). This is a description ‘drawing on but going beyond different positional observations’ (Sen 2002b: 467). The result of Smith’s circumscription is a general benchmark, in which positional objectivity is reached through a ‘view from nowhere’ (see above). A striking instantiation of moral circumscription is to be found in Smith’s emphasis upon moral command: too great a display of joy or grief would inhibit the sympathetic reaction of the spectator. It is therefore essential to curb the excess of one’s own feelings and to reduce them to a lower degree than would occur naturally. (Vivenza 2001: 46)

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In this case, circumscription takes a characteristic Stoic turn. For self-command is attained ‘by viewing what happens to you in the same light as your neighbour would – with, in other words, a degree of detachment’ (Vivenza 2001: 58). To remove rationality twists when comparisons are moved to a set of higherorder states, circumscription has to successfully reduce the number of positive instances of a specific predicate. This is what happens when second-order intersections limit the positive instances of first-order states to the ‘most distinctive’ instance in each situation set. Indifference may be excluded precisely because we have assumed that the rationality twist between second-order states Sp and Sp–1 is due to the difference between the ‘last elements’ Sp+1 and Sp+2 of the respective situation sets for individuals A and B. Indifference of second- (and higher-) order states may be excluded for the reason given in Note 22. In this way, the impartial spectator would work as a heuristic device and moral judgement would be at its most effective when the appropriate level of circumscription is identified. These are higher-order states derived (directly or indirectly) from first-order experiences, and allowing individuals to appraise mutual differences in terms of a common ‘reflective’ standard (see, in particular, section III). The relation between different criteria for the identification of social congruence bears some similarity with the continuum of inductive methods described by Rudolph Carnap (1952).

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27 The analytical continuum of congruence criteria should not conceal that certain criteria are more specifically associated with particular contexts. For example, Emma Rothschild has recently argued that a developed commercial society presupposes ‘independence of mind’ (and presumably also the propensity to reflective thinking that Smith associates with fellow-feeling) (Rothschild 2001: 10). 28 In his ‘History of Astronomy’, Smith maintains that one should consider: the different systems of nature [. . .] with inquiring how far each of them was fitted to sooth the imagination, and to render the theatre of nature a more coherent, and therefore a more magnificent spectacle, than otherwise it would have appeared to be. (1980 ‘Astronomy’, II.12) 29 Given the general significance of connecting principles, fellow-feeling is important ‘in helping each of us to understand the principles that others use’ (Loasby 2000: 9). 30 A reflective equilibrium among belief states may be defined as a higher-order set of beliefs such that we are persuaded that such beliefs are ultimately coherent among them (see Daniels 1996; see also, for earlier developments of that concept, Goodman 1955, and Rawls 1971). 31 Such heuristics reflects the fact that the identification of the impartial spectator may derive from a lengthy cognitive process, in which contexts may be necessary in inducing a suitable concentration of attention (and a suitable circumscription) (see also Scazzieri 2003a).

Bibliography Addison, J. (1724) Dedication to John Lord Sommers and entry dated ‘Thursday March 1, 1711’, The Spectator, the seventh edition (by Addison, Steele and others), vol. I, London, printed for J. Tonson. Aumann, R. (1976) ‘Agreeing to disagree’, Annals of Statistics, 4: 1236–9. Bacharach, M. (1989) ‘The role of “Verstehen” in economic theory’, Ricerche Economiche, 43: 129–50. Bagolini, L. (1975) La simpatia nella morale e nel diritto, 3rd edn, revised and extended, Turin: Giappichelli. Brown, V. (1994) Adam Smith’s Discourse: Canonicity, Commerce and Conscience, London and New York: Routledge. Carnap, R. (1952) The Continuum of Inductive Methods, Chicago: University of Chicago Press. Daniels, N. (1996) Justice and Justification: Reflective Equilibrium in Theory and Practice, New York: Cambridge University Press. Gallese, V., Ferrari, P.F., and Umiltà, M.A. (2002) ‘The mirror matching system: a shared manifold for intersubjectivity’, Behavioral and Brain Sciences, 25: 35–6. Giunchiglia, F. (1993) ‘Contextual reasoning’, Epistemologia (Special issue ‘I linguaggi e le macchine’), 16: 345–64. Goodman, N. (1955) Fact, Fiction, and Forecast, Cambridge, MA: Harvard University Press. Hardy, C. (1998) Networks of Meaning: A Bridge between Mind and Matter, Westport, CT: Praeger Publishers.

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Hayek, F.A. (1952) The Sensory Order, Chicago: University of Chicago Press. –––– (1967) ‘The Theory of Complex Phenomena’, in F.A. Hayek, Studies in Philosophy, Politics and Economics, London and Henley: Routledge & Kegan Paul, pp. 22–42. –––– (1973) ‘The place of Menger’s Grundsätze in the history of economic thought’, in Carl Menger and the Austrian School of Economics, J.R. Hicks and W. Weber (eds), Oxford: Clarendon Press, pp. 1–14. –––– (1978) New Studies in Philosophy, Politics, Economics and the History of Ideas, London and Henley: Routledge & Kegan Paul. –––– (1979) Law, Legislation and Liberty: A New Statement of the Liberal Principles of Justice and Political Economy. Vol. 3: The Political Order of a Free People, London: Routledge & Kegan Paul. Kahneman, D. and Tversky, A. (1979a) ‘Prospect theory: an analysis of choice under risk’, Econometrica, 47: 263–91. –––– (1979b) ‘Choices, values and frames’, American Psychologist, 39: 341–50. –––– (2000) Choices, Values and Frames, Cambridge, New York and Melbourne: Cambridge University Press for Russell Sage Foundation. Keynes. J. M. (1921) A Treatise on Probability, London: Macmillan. Khalil, E. (2002) ‘Similarity versus familiarity: when empathy becomes selfish’, Behavioral and Brain Sciences, 25: 41. –––– (2003) ‘The context problematic, behavioural economics and the transactional view: an introduction to “John Dewey and Economic Theory”’, Journal of Economic Methodology, 10: 107–30. Kukathas, C. (1990) Hayek and Modern Liberalism, Oxford: Clarendon Press. Kyburg, H.E. and Man Teng, C. (2001) Uncertain Inference, Cambridge: Cambridge University Press. Leites, E. (1988) ‘Casuistry and character’, in Conscience and Casuistry in Early Modern Europe, E. Leites (ed.), Cambridge: Cambridge University Press, pp. 119–33. Loasby, B. J. (2000) ‘How do we know?’, in Economics as an Art of Thought: Essays in Memory of G.L.S. Shackle, P.E. Earl and S.F. Frowen (eds), London and New York: Routledge, pp. 1–24. –––– (2002) ‘The evolution of knowledge: beyond the biological model’, Research Policy, 31: 1227–39. MacCarthy, J. (1980) ‘Circumscription – a form of nonmonotonic reasoning’, Artificial Intelligence, 13: 27–39. –––– (1986) ‘Applications of circumscription to formalizing common sense’, Artificial Intelligence, 19: 89–116. MacCarthy, J. and Hayes, P.J. (1969) ‘Some philosophical problems from the standpoint of artificial intelligence’, Machine Intelligence, 4: 463–502. http://www. -formal.stanford.edu/jmc (accessed 7 December 2004). Macfie, A.L. (1967) The Individual in Society: Papers on Adam Smith, London: Allen and Unwin. Nagel, T. (1986) The View from Nowhere, Oxford: Clarendon Press. Porta, P.L. and Scazzieri, R. (2001) ‘Coordination, connecting principles and social knowledge: an introductory essay’, in Knowledge, Social Institutions and the Division of Labour, P.L. Porta, R. Scazzieri and A.S. Skinner (eds), Cheltenham, and Northampton, MA: Edward Elgar, pp. 1–32.

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–––– (2003) ‘Accounting for social knowledge in economic analysis: the relevance of Adam Smith’s framework’, in Cognitive Developments in Economics, S. Rizzello (ed.), London: Routledge, pp. 107–32. Raphael, D.D. and Macfie, A.L. (1976) ‘Introduction’, in A. Smith, The Theory of Moral Sentiments, vol. I of The Glasgow Edition of the Works and Correspondence of Adam Smith, Oxford: Clarendon Press, pp. 1–52. Rawls, J. (1971) A Theory of Justice, 2nd edn, 1999, Cambridge, MA: Harvard University Press. Rizzolatti, G. and Gallese, V. (2002) ‘From mirror neurons to imitation: facts and speculations’, in The Imitative Mind: Development, Evolution, and Brain Bases, A. Meltzoff and W. Prinz (eds), Cambridge: Cambridge University Press, pp. 247–66. Rothschild, E. (2001) Economic Sentiments: Adam Smith, Condorcet and the Enlightenment, Cambridge, MA and London: Harvard University Press. Scazzieri, R. (2001a) ‘Analogy, causal patterns and economic choice’, in Stochastic Causality, M.C. Galavotti, P. Suppes and D. Costantini (eds), Stanford, CA: CSLI Publications, pp. 123–39. –––– (2001b) ‘Patterns of rationality and the varieties of inference’, Journal of Economic Methodology, 8: 105–10. –––– (2003a) ‘Experiments, heuristics and social diversity: a comment on Reinhard Selten’, in Observation and Experiment in the Natural and Social Sciences, M.C. Galavotti (ed.), Dordrecht: Kluwer, pp. 85–98. –––– (2003b) ‘A theory of framing and coordination: Hayek and the Scottish tradition’, Rivista Internazionale di Scienze Economiche e Commerciali, 50: 323–49. Sen, A. (1999) Reason before Identity, The Romanes Lecture for 1998, delivered before the University of Oxford on 17 November 1998, Oxford: Oxford University Press. –––– (2002a) ‘Maximization and the act of choice’, in Rationality and Freedom, Cambridge, MA and London, England: The Belknap Press of Harvard University Press, pp. 158–205. –––– (2002b) ‘Positional objectivity’, in Rationality and Freedom, Cambridge, MA and London, England: The Belknap Press of Harvard University Press, pp. 463–83. Shackle, G.L.S. (1979) Imagination and the Nature of Choice, Edinburgh: Edinburgh University Press. Skinner, A.S. (1996) A System of Social Science: Papers Relating to Adam Smith, 2nd edn, Oxford: Oxford University Press. Smith, A. (1976a) [1759] The Theory of Moral Sentiments, D.D. Raphael and A.L. Macfie (eds), vol. I of The Glasgow Edition of the Works and Correspondence of Adam Smith, Oxford: Clarendon Press. –––– (1976b) [1776] An Inquiry into the Nature and Causes of the Wealth of Nations, General eds R.H. Campbell and A.S. Skinner; textual editor W.B. Todd, Oxford: Clarendon Press. –––– (1978) Lectures on Jurisprudence, R.L. Meek, D.D. Raphael and P.G. Stein (eds), Oxford: Clarendon Press. –––– (1980) [1795] ‘The Principles which Lead and Direct Philosophical Enquiries: Illustrated by the History of Astronomy’ (‘Astronomy’), in A. Smith, Essays on Philosophical Subjects, W.P.D. Wightman (ed.), Oxford: Clarendon Press.

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Suppes, P., Pavel, M. and Falmagne, J. (1994) ‘Representations and models in psychology’, Annual Review of Psychology, 45: 517–44. Turner, M. (2001) Cognitive Dimensions of Social Science, Oxford: Oxford University Press. Vivenza, G. (2001) Adam Smith and the Classics: The Classical Heritage in Adam Smith’s Thought, Oxford: Oxford University Press. Young, J. (2001) ‘Adam Smith’s two views of the market’, in Knowledge, Social Institutions and the Division of Labour, P.L. Porta, R. Scazzieri and A.S. Skinner (eds), Cheltenham and Northampton, MA: Edward Elgar, pp. 95–110.

Adam Smith and new institutional theories of property rights Jeffrey T. Young

A rich and prolific literature has developed in the economics profession in the last 50 years that addresses the problem of the origin and evolution of property rights. Starting from the economic theory of common property resources, economists have argued that the emergence and evolution of property rights can be seen as the response of rational agents adapting to the problems associated with the use of resources that are socially scarce, but freely open to all comers. Formal property rights are rooted in agreed rules that establish exclusive privileges in order to prevent the dissipation of economic rent, or surpluses, available to the ‘owner’ of the resource. This literature has developed almost completely independently of any knowledge that Adam Smith, the reputed founder of modern economics, also developed a theory of the origin and evolution of property rights. The purpose of this paper is, in some sense, to bring this literature into contact with what Smith had to say on the same subject. In particular, I will argue that while the modern theory treats the problem as a purely economic one, Smith viewed it as essentially a philosophical one. Thus, new institutionalists argue that they can deduce property rights from models of rational, utility-maximizing agents confronted with the problem of scarcity. Smith, however, builds his analysis on the philosophical foundations Hume laid down in his Treatise of Human Nature. The result is a much richer, more plausible explanation of property rights in terms of how they emerge to promote economic efficiency in particular and social life generally. Despite the reverence in which Smith’s invisible hand principle is held in modern economics, Smith’s theory of property rights is a much more thoroughgoing invisible hand theory in the sense that social order as an unintended consequence plays a much more prominent role. Using Vernon Smith’s terminology one could say that the new institutional literature takes a constructivist rationality approach in that the socially rational institution of property is seen as deriving from consciously deductive human reason (V. Smith 2003: 467). By way of contrast Smith’s theory exhibits ecological rationality in that socially rational institutions are seen to emerge spontaneously as the result of an evolutionary process of mutation and selection (V. Smith 2003: 469–70).

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The paper is divided into three sections and a conclusion. The first part presents a brief overview of new institutional thought on property rights, while the second takes a brief look at the history of thought as it appears in this literature. This serves as a bridge to the third part, Smith’s theory.

I The modern theory of property rights

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The modern, ‘new institutional’, property rights literature is now immense, but it seemed to really get off the ground in the 1960s with the publication of Coase’s seminal article on social cost, which initiated deeper discussions in a number of interrelated directions including the role of the delineation of property rights in the allocation of scarce resources. Alchian and Demsetz made important early contributions (Alchian 1977 [1965], Demsetz 1967). In attempting to briefly and efficiently characterize this literature I shall present what seems to me to be a common thread of thought running throughout. This is the theory of rent dissipation in a common property resource. As is the case with attempting to pin down the historical origins of important ideas in the history of economics, the modern property rights literature built on important earlier contributions. Frank Knight, for example, had already pointed out the importance of ownership in criticizing Pigou’s argument that unregulated competition would result in over-investment in increasing-cost industries (Knight 1924). In essence Knight argued that Pigou’s result would obtain only when the scarce resource subject to increasing cost was unowned (Knight 1924: 586). Using the example of a superior farm, he pointed out that in the absence of ownership farmers would essentially crowd onto the superior land until the average product of labour on that land equalled the marginal product of labour on the next best piece of land. H. Scott Gordon then formalized this result in his analysis of the fishery as a common property resource (Gordon 1954). He showed that in the absence of any way of excluding potential fishermen from a fishery, economic rent would be dissipated and the fishery would be managed inefficiently. The argument is by now quite familiar among economists, but since it plays such a central role in the modern literature, a brief exposition would be in order. Figure 3 depicts the situation of an open-access fishery where the composite labour and capital invested in people, boats, and equipment is treated as homogeneous ‘fishing effort’. Gordon argued that this input would be subject to diminishing returns because increasing effort would reduce the fish population (Gordon 1954: 129), but the same result obtains for any fixed resource, such as land or water. For simplicity the marginal and average opportunity costs of the resources devoted to fishing effort are assumed to be constant. The social net product is maximized with fishing effort E*, and it would be appropriated as economic rent (ABCD), if there was someone to claim

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B

A

C

D

AC, MC

MP 0

E*

AP E'

Fishing effort

Figure 3 Common property resources

it. However, in the open-access case the opportunity to earn rent draws increasing numbers of fishermen into the area and exploitation continues until all returns are equal to opportunity costs at E′. The economic rent is dissipated and all factors earn only their opportunity return. The openaccess equilibrium, then, is shown to be socially inefficient. Cheung (1974 [1970]) further refined the analysis to show that E′ is reached in the limit as the number of fishermen expands toward infinity. Clearly, if the first boats on the scene could exclude the latecomers from the fishery, they would be able to prevent rent dissipation. Enter the concept of property rights. Furubotyn and Pejovich give a typical modern definition: ‘Property rights are understood as the sanctioned behavioural relations among men that arise from the existence of goods and pertain to their use’ (Furubotyn and Pejovich 1974: 3; italics in original). To this Barzel, among others, has noted that no sort of right can actually guarantee use, the concept essentially means that the owner may form certain sorts of expectations with respect to use (Barzel 1997: 3). Many also explicitly note exclusivity as an attribute of property rights. Thus, we have three significant attributes of property rights according to this literature: exclusivity, expectations of use, and social enforcement of some sort (formal governmental arrangements may or may not exist).1 While the theory of rent dissipation in an open-access resource demonstrates that the delineation of property rights matter to the allocation of scarce resources in society, the question of the origin of such rights naturally presents itself. The new institutional theorists are quite critical of the conventional Walrasian theory of general equilibrium and its associated theorems on welfare maximization in a perfectly competitive economy. The model implicitly assumes that private property rights are costlessly

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defined, transferred, and enforced. In short, property rights are exogenous. The hallmark of the new institutional approach is to explain the origin and evolution of property rights as the response of rational, utility-maximizing (or sometimes wealth-maximizing), agents to changing conditions of economic scarcity. Property rights must be treated as endogenous to the system, not givens. Demsetz argued that: property rights develop to internalize externalities when the gains of internalization become larger than the cost of internalization. Increased internalization, in the main, results from changes in economic values, changes which stem from the development of new technology and the opening of new markets, changes to which old property rights are poorly attuned. (Demsetz 1967: 350) Thus, in the rent dissipation model in the early stages of the operation of the fishery the human population might not be large enough to place serious economic pressure on the fish resource. But human population growth would lead eventually to the state described in the model. As it does, externalities in the form of fish depletion would emerge, and as the value of the resource continued to increase, the benefits to establishing some sort of enforced exclusionary practice would begin to emerge. As we will see below, Demsetz tests the model using evidence from Native American responses to the introduction of European demand for fur into their beaver trapping economy. Umbeck criticized Demsetz for ignoring the costs of establishing exclusivity, but he is dealing with essentially the same question: ‘If a group of individuals is placed in a world of scarce resources, with no government to assign ownership rights and no laws to restrict individual behaviour, what will they do?’ (Umbeck 1977: 198). They will establish certain agreed-upon rights, for which the explicit contract is an observable proxy (Umbeck 1977: 197). Just as conventional neoclassical economics depicted agents as rational utility-maximizers under constraint, we have emerging here the idea that the delineation of property rights is also the result of rational estimation of benefits and costs. Anderson and Hill formalized this in a simple model that determines how rational individuals would allocate resources to activities that define and enforce property rights (Anderson and Hill 1975). Whether explicitly acknowledged or not, it seems at least in its basics to be widely shared in the economics of property rights literature. As depicted in Figure 4 rational agents will engage in activities aimed at defining and enforcing property rights up to the point where the marginal benefit (MB) equals the marginal cost (MC). The power of the model resides in the analysis of the factors, such as technology or changing market conditions that cause the curves to shift

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Jeffrey T. Young Value Marginal cost

Marginal benefit Definition and enforcement activity

Figure 4 Efficient property rights definition

and the predicted changes in the levels of these activities. Thus, a technological improvement that reduces the cost of defining or enforcing rights shifts MC out to the right and an increase in property rights definition follows. In their most recent contribution Anderson and Hill explore the role of property rights entrepreneurs in noticing and then exploiting such changes (Anderson and Hill 2003). Before considering some of the historical evidence presented for the theory, I wish to comment on the highly rational, constructivist nature of the theory. Consider, for example, the following comments: Whether or not it pays to increase the extent to which we exchange via markets, protect private property rights, or use alternative government devices depends on how much we will thereby reduce production cost and crop damage. (Demsetz 1964: 25; emphasis added) the development of property rights can be deduced theoretically. (Furubotyn and Pejovich 1974: 9; emphasis added) People acquire, maintain, and relinquish rights as a matter of choice . . . What is found in the public domain, therefore, is what people have chosen not to claim. (Barzel 1997: 92; italics in original) Probably the first step towards the creation of individual property rights was for a tribe to establish or to try to establish its exclusive right over a piece of land, fishing, or hunting grounds in order to consume some rent. (Pejovich 1975 [1972]: 40; emphasis added)

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Since acquisition of information is itself costly, not all potential benefits and costs of actions will be known in advance (Demsetz 1975 [1966]: 187). Thus, the theory is capable of handling imperfect information. Nonetheless, the theory assumes highly rational agents who have at least some foreknowledge of benefits and costs. Indeed, it must assume that at some level agents perceive the availability of rent, which in turn implies that failure to define property rights is also a conscious decision. Presumably they know that remote effects are too costly to become informed about and take into account. As a result the theory is purely deductive and teleological in its methodology. As we shall argue below, this stands in stark contrast with Smith’s inductive, non-teleological approach. Nonetheless, it is highly plausible, and a substantial amount of historical evidence is presented in its favour. The European settlement of North America provides a rich array of historical case studies. Demsetz initially related how the Montagnes of Labrador reacted to the introduction of European demand for beaver fur by establishing certain kinds of exclusive arrangements such as territorial rights and marking beaver houses (Demsetz 1967: 352). Umbeck’s research has shown that mining districts, governed by explicit, majority agreed, contracts emerged during the California Gold Rush of 1848–50 (Umbeck 1977, 1981). As the population of miners soared, extreme pressure was placed on the resource, and subsequent exclusive agreements developed to protect individual claims. It is easy to see these as historical examples of the MB curve shifting outward in Figure 4, and the subsequent increase in property rights definition and enforcement activity. Anderson and Hill also present evidence from the settlement of the Great Plains with respect to land, water, and cattle (Anderson and Hill 1975, 1977). A classic case is the invention of barbed wire and its use in enclosing land in the tree-less Great Plains. The MC curve shifts outward following a technological change, and, as predicted, land is quickly enclosed. Dennis applied the theory specifically to the emergence and activities of cattlemen’s associations as organizations designed to protect economic rent (Dennis 1976). North and Thomas, in a new institutional classic, apply it to explain European economic success (North and Thomas 1973). This brief overview of the new institutional economics of property rights is not intended to be exhaustive. However, I do believe it is highly representative of, at least a significant stream of, the new institutional literature. While remaining in the same methodological framework as standard microeconomics, this is a rich, scientifically progressive research programme, the importance of which the Nobel Prize committee has justly recognized on more than one occasion. The new institutional economics of property rights views the establishment of such rights as an intentional act by rational utility-maximizing agents. They are motivated by a desire to capture and protect economic rent, which becomes available once scarcity sets in. As such the theory is rationalistic, deductive, and teleological: property rights

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are deduced theoretically and explained according to the economic function they perform. Property rights emerge as a rational response to scarcity; explaining them is a quintessentially economic problem. There is much corroborating historical evidence presented in favour of the theory. However, one wonders if only the ‘success stories’ are being told. Modern environmentalists, for example, point to the demise of the Easter Island civilization as an example of a people failing to live within ecological limits (Lomborg 2001: 29). Closer to home, Carlos and Lewis, contra Demsetz, argue that the natives around the south-western end of Hudson’s Bay depleted the beaver population in the region (Carlos and Lewis 1999). They cite native customs and beliefs, such as the ‘Good Samaritan’ principle and reincarnation, to explain the failure of the natives in this region to establish property rights over beaver (Carlos and Lewis 1999: 709–11). This at least suggests that the potential to capture positive economic rent is at best a necessary, but not sufficient, condition for property rights to emerge. In presenting a richer, more nuanced theory of property rights, I will suggest that Smith is able to handle this sort of counter-evidence.

II Property rights in the history of economic thought Despite the reverence in which Adam Smith is held amongst new institutionalists, he is conspicuously absent from the economics of property rights literature. The literature summarized above contains virtually no references to Smith. Indeed, Pejovich credits Marx and Engels with the first attempt among economists to develop a theory of the endogenous determination of property rights (Pejovich 1975 [1972]: 44). At one level this is easily understandable. Many of the leading lights are of the generation of economists who would have still been required to read and master the classics of economics, including, of course, the Wealth of Nations (WN 1976b). However, WN contains only fleeting comments, which might be used to discern what, if anything, Smith had to say about property rights. For example, in discussing the injustice of apprenticeship laws, Smith states, ‘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’ (WN I.x.c.12). However, there is no developed theory of the origin and evolution of property rights in WN, and the Lockean nature of this pronouncement is actually highly misleading as a clue to the theory Smith developed elsewhere.2 As is now known, there is such a theory in his Lectures on Jurisprudence (Smith 1978, ‘Lectures’), but even there the most complete extant statement of it is in the Report of 1762–3 (LJA), which was first published only in 1978, later than much of the literature discussed in the previous part. It is not surprising that economists are unaware that Smith did produce a substantial theory of property rights, and that they would assume that to the extent that Smith might have had

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a theory it was entirely Lockean. This in turn being associated (incorrectly) with the labour theory of value would reinforce the notion that there is nothing useful in Smith other than his reverence for property and his analysis of the duty of government to establish an ‘exact administration of justice’ (WN IV.ix.51). There is some recognition in the literature that seventeenth- and eighteenth-century figures have written fruitfully on property rights. Barzel, for example, acknowledges the Hobbesian flavour of his analysis of the origin of property rights (Barzel 1997: 68–88). The late Edwin West attempted to provide some historical background to the new institutional theories (West 2003). However, despite West’s stature as a Smith scholar, he chooses to ignore the material in the Lectures, in favour of picking up some themes from WN. He suggests that in his discussion of the third duty of the sovereign (the provision of certain public works), properly understood, Smith anticipated Knight’s argument against Pigou. In particular, West argues that Smith envisioned roads being provided by privately owned joint-stock companies, which would charge a toll for their use, based on expected wear and tear. Therefore, ‘like Frank Knight, Smith did not neglect the issue of resource ownership and the incentives it creates’ (West 2003: 28). In addition, West brings out the Lockean influence on Smith, noting that ‘the writings of Adam Smith suggest the natural law approach of Locke’ (West 2003: 39). However, this is done primarily to make the point that Smith, like Locke, viewed property rights as inextricably associated with individual liberty. It is certainly true that Smith favoured the use of market principles in the provision of public services, and that he shared with Locke a devotion to liberty (but not necessarily political democracy), but this skirts the issue of what if anything Smith might have had to say about the very same issues the new institutionalists are addressing: the origin and evolution of property rights.3

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West’s piece serves to reinforce the Lockean influence on Smith. While they certainly shared a reverence for liberty and property, Smith’s theory of property rights offers an alternative account of their origin, evolution, and moral authority. Haakonssen and Winch were among the first researchers to gain access to the Report of 1762–3, and they both concluded that Smith’s theory was not Lockean (Haakonssen 1981: 106–7; Winch 1978: 58–9). In previous work I have also argued against the Locke connection, showing how Smith’s theory underpins his various different theories of value (Young 1995, 1997). It is my view that if we wish to understand the development of Smith’s moral theory in general, and his theory of property rights in particular, we must view them against the background of Hume’s Treatise of Human Nature (THN 2000). This is the approach I take here.4

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For Hume justice and property are treated as virtually synonymous. His theory of justice and his theory of property rights are, therefore, one and the same. He then draws an important distinction between justice and benevolence. Justice, says Hume, is an artificial virtue, while benevolence is natural. By this he means simply that justice is a human convention, it is not in any sense original in human nature (THN 3.2.2.9). Benevolence, however, is natural in the sense that it occurs in all societies whether they have developed the conventions associated with justice or not (THN 3.3.1). Although justice is artificial in this sense, Hume still considers it natural in the sense that ‘nature must furnish the materials [sentiments], and give us some notion of moral distinctions’ (THN 3.2.2.25; see also Hume 1975, second Enquiry (EPM) App. III.258). Hume divides his treatment into two questions: how the rules of justice are originally established and how we come to attach merit to the observance of these rules and demerit to their violation (THN 3.2.2.1). The first question is further subdivided into a general theory of the origin of justice and a discussion of the origin of the specific rules for assigning property rights. In this latter account Hume follows the typical pattern of the jurisprudence literature of rights arising from occupation, accession, tradition, prescription, and succession. In answering these questions Hume deploys three separate arguments. As is well known Hume’s general theory asserts ‘that ‘tis only from the selfishness and confin’d generosity of man, along with the scanty provision nature has made for his wants, that justice derives its origin’ (THN 3.2.2.18; italics in original). When these conditions are present people learn from experience that their self-interest is better served in the long run, and in the main, if they constrain their natural desire to have more by protecting themselves from each other’s encroachment on their possession. Hume’s approach is, thus, strikingly similar to new institutional theory. The theory of rent dissipation in an open access resource would not have surprised him. However, Hume insists that this arises, ‘by a convention enter’d into by all the members of the society . . .’; it is, however, ‘not of the nature of a promise’ (THN 3.2.2.9,10; italics in the original). It does not originally arise as the result of a conscious, explicit agreement. As he has already observed a few paragraphs previously: But in order to form society, ‘tis requisite not only that it be advantageous, but also that men be sensible of its advantages; and ‘tis impossible, in their wild uncultivated state, that by study and reflection alone, they shou’d ever be able to attain this knowledge. (THN 3.2.2.4) The origins of society must be explained as an unintended consequence of something else, some immediate necessity, such as the ‘natural appetite betwixt the sexes . . .’ (THN 3.2.2.4). In similar fashion ‘the rule

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concerning stability of possession . . . arises gradually, and acquires force by a slow progression, and by our repeated experience of the inconveniencies of transgressing it’ (THN 3.2.2.10). In this way justice is like language and money: human conventions that arise unplanned out of experience. Hume, as a leading light in the Scottish Enlightenment, is offering what we would call an ‘unintended consequences’ or ‘emergent order’ theory. As Livingston puts it, ‘A Humean convention is not the result of conscious agreement but is arrived at over time as the unintended result of man’s involvement with the world and with his fellows’ (Livingston 1984: 4). Moreover, it is not our ideas, but rather our impressions that lead us to the sense of justice (THN 3.2.2.20). That all ideas derive from impressions, Livingston has called Hume’s ‘First Principle’, and we see it at work here in his account of justice (Livingston 1984: 60). To explain the quality of moral approval or disapproval people come to attach to the observance or violation of the rules established in this way, Hume develops his seminal account of moral approbation in his doctrine of sympathy, which need not be fully explicated here. For our present purposes we may observe that sympathy provides Hume with the impression necessary to derive this sense of justice, the idea of property as a moral relation. At this point Hume asserts that although ‘self-interest is the original motive to the establishment of justice . . . a sympathy with public interest is the source of the moral approbation, which attends that virtue’ (THN 3.2.2.24; italics in the original). In this way we derive pleasure or pain from what promotes the pleasure or pain of others in society even when our own interest is not involved. In Hume’s view this is the only way we can account for moral approbation when it is the system of justice as a whole, not each individual act, which is socially useful. Indeed, in particular cases it may seem that actions which violate the rules may be seen as more just (THN 3.2.2.22). Hume postpones to the next part of the Treatise his full treatment of the doctrine of sympathy, but there is some evidence that he was never satisfied with this account. The whole question, for example, received more cursory treatment in the second Enquiry where he simply asserts that justice derives its moral quality from ‘reflections on the beneficial consequences of this virtue . . .’ (EPM III.I.145). Sympathy there seems to be equated to ‘the natural sentiment of benevolence . . .’ which causes us to be concerned about ‘the interests of mankind and society’ (EPM V.II.187). Duncan Forbes, for example, suggests that he ‘retreated from the suggestive and original analysis of sympathy in the Treatise’ (Forbes 1975: 15). We come now to Hume’s treatment of the emergence of particular rules for assigning property rights. He begins: Tho’ the establishment of the rule, concerning the stability of possession, be not only useful, but even absolutely necessary to human

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It is here that Hume takes up the traditional discussion of occupation, accession, prescription, tradition, and succession both in the main text and in a series of lengthy footnotes. Here we encounter minutiae relevant to the assignment of rights, such as when exactly are we deemed to possess an animal we have caught or are chasing, which cannot be addressed by an appeal to reason or public interest (THN 3.2.3.1, n.73). Hume, then, falls back on the theory of causation and the association of ideas in the imagination, which he developed in the first book of the Treatise. Property is treated as a relation between a person and things which the imagination comes to view as closely connected in the same way as the mind learns to connect two events when it makes a causal judgment. Hume’s approach to the three questions on the origins of property in general, the sense of morality attached to it, and the derivation of the particular rules for assigning property rights to particular individuals provide the elements of the theory that will be of importance in what follows on Smith. Thus, the utilitarian account of justice as a social convention arising without intentional forethought, sympathy for the general well-being of others, and the theory of the association of ideas were seminal to Smith in the development of his theory. As did Hume, Smith begins by distinguishing between the virtues of justice and benevolence. However, Hume’s lengthy discussion of the artificiality of justice is missing in Smith’s account. Both justice and benevolence are treated as natural. Smith certainly agrees with Hume that the rules of justice are human conventions that arise gradually in society, and Hume agrees that justice is natural in the sense that the sentiments which give rise to justice are natural in humans. The distinction is, therefore, not of great importance in that they both agree that justice is of human origin and that it must be explained in terms of universal characteristics of human nature. In the Lectures Smith relates these two virtues to perfect and imperfect rights respectively, thus linking his account explicitly to the natural law tradition going back via Hutcheson to Pufendorf, a manoeuvre which Hume eschews (LJA i.14). Also, contra Hume, Smith separates his treatment of justice from that of property. The former is taken up in his general theory of the moral sentiments, while the latter is taken up as a category of natural rights, within the general concept of justice. Like Hume, Smith has both a general and a specific account. However, the general account runs under the category of justice, while the specific account is treated as

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property. Smith also follows the traditional categories of occupation, accession, tradition, prescription, and succession, but his account of the origin of property falls within these categories. Smith accepts Hume’s general account based on scarcity as we see him noting, for example, that air, running water, and the sea cannot become property because ‘they cannot be lessened or impaired by use, nor can anyone be injured by the use of them’, but fisheries being ‘not unexhaustible’ can legitimately be protected from encroachment (LJA i.60, 63). Smith’s approach, based on injury, thus presupposes Hume’s general theory. In the Lectures when Smith takes up the right of property he begins by noting that Property, or dominium, is a right to a particular thing, or real right, by which ‘a man has the sole claim to a subject, exclusive of all others, but can use it himself as he thinks fit, and if he pleases abuse or destroy it’ (LJA 1.17). In taking up the origin and development of the institution of property, Smith first notes that property rights present: the only case where the origin of naturall rights is not altogether plain . . . It does not at first appear evident that, e.g. any thing which may suit another as well or better than it does me, should belong to me exclusively of all others barely because I have got it into my power; as for instance, that an apple, which no doubt may be as agreeable and as useful to an other as it is to me, should be altogether appropriated to me and all others excluded from it merely because I had pulled it off the tree. (LJA i.25; emphasis added) Property is not a self-evident idea. It is not an innate idea or deducible from self-evident propositions. Smith implies here that rationalist theories of the type found particularly in Locke will not work. As in the case of the moral sentiments generally, the idea of property, or of an exclusive privilege, must first arise in the course of human experience. Smith makes this very clear with respect to a closely associated social phenomenon: ‘This division of labour, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees and intends that general opulence to which it gives occasion’ (WN I.ii.1). The principle applies to Smith’s theories of justice and property. Having thus explained acquisition of an exclusive right or privilege in an object for which another person may have a greater need, Smith goes on to discuss five ways in which a person may acquire property: occupation, tradition (that is, voluntary transfer), accession (by which minerals under the ground belong to the owner of the surface), prescription (‘by which a thing that has been for a long time out of the right owner’s possession and in possession of another, passes in right to the latter’, LJA i.26), and succession (inheritance) (LJA i.25–6). Of these, occupation, ‘by which we get anything into our power that was not the property of another before’

60 Jeffrey T. Young (LJA i.25), and accession deal with the origin of property and are the most relevant here. In the hunting stage of society, property was only a very rudimentary concept attached to things immediately in a person’s possession. In this stage, first possession or occupation, is the origin of property rights. In his treatment of occupation, Smith states: From the system I have already explain’d, you will remember that I told you we may conceive an injury was done one when an impartial spectator would be of opinion he was injured, would join with him in his concern and go along with him when he defended the subject in his possession against any violent attack, or used force to recover what had been thus wrongly wrested out of his hands . . . The spectator would justify the first possessor in defending and even in avenging himself when injured . . . The cause of this sympathy or concurrence betwixt the spectator and the possessor is, that he enters into his thoughts and concurs in his opinion that he may form a reasonable expectation of using the fruit or whatever it is in what manner he pleases . . . The reasonable expectation therefore which the first possessor furnishes is the ground on which the right of property is acquired by occupation. (LJA i.36–7; cf. LJB 150, 181–25) In this passage, Smith explains that the rights people come to accord to the first possessor can be explained as an application of the theory of justice he developed in The Theory of Moral Sentiments (TMS 1976a), which he taught prior to jurisprudence in his course. It is here where Smith first presents an unintended consequences theory of social order. Smith sets out the model and applies it to an analysis of the interplay between justice and utility in Part II Section ii in TMS. Having first contrasted the virtues of justice and benevolence, Smith defines the laws of justice as those which guard a person against injury in the form of loss of life, health, possessions, estate, or personal rights (TMS II.ii.2.2). It is here where he explains how the impartial spectator’s sympathy with the resentment of the injured party lies behind the formation of rules to protect against such injuries, and the moral authority accorded to those rules. These rules derive from the interactions of ordinary people functioning in a society. The people themselves are assumed to have no knowledge of the larger social consequences of their actions. A person is injured and the observer immediately feels resentment toward the perpetrator and sympathy for the victim. These actions are not the result of reasoned reflection, although the process of achieving mutual sympathy does require some significant mental activity, at least until it is thoroughly learned. The agents are essentially operating on natural feelings about the actions which they observe among their fellows. The pleasure of mutual sympathy alone

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leads to the proper degree of self-command and of fear of remorse necessary to generate just behaviour as a norm. In the next chapter Smith points out that this ‘constitution of Nature’ has utility. From looking at justice from the perspective of the natural desires and knowledge of the individual agents involved, Smith asks us to step back and take a larger, philosophical perspective on the same set of actions. From this perspective we learn that ‘It is thus that man, who can subsist only in society, was fitted by nature to that situation for which he was made’ (TMS II.ii.3.1). Indeed we learn that justice is the sine qua non of society itself: ‘Beneficence . . . is less essential to the existence of society than justice. Society may subsist, though not in the most comfortable state, without beneficence; but the prevalence of injustice must utterly destroy it’ (TMS II.ii.3.3). Justice is a necessary condition for the existence of society. There follows a lengthy paragraph on the importance of being able to distinguish between efficient and final cause in a world where ‘we observe the means adjusted with the nicest artifice to the ends which they are intended to produce . . .’ (TMS II.ii.3.5). In particular, when it comes to understanding social life, phenomena which are produced by the actions of the mind, we are likely to confuse ends and means and to suppose that knowledge of the ends is the explanation for the emergence of the means. But though, in accounting for the operations of bodies, we never fail to distinguish in this manner the efficient from the final cause, in accounting for those of the mind we are very apt to confound these two different things with one another. When by natural principles we are led to advance those ends, which a refined and enlightened reason would recommend to us, we are very apt to impute to that reason, as to their efficient cause, the sentiments and actions by which we advance those ends, and to imagine that to be the wisdom of man, which in reality is the wisdom of God. (TMS II.ii.3.5) The immediate background is that Smith is persuaded that Hume has failed to offer a thoroughgoing unintended consequences theory of justice. Hume emphasized social utility as the only reason for developing the conventions of justice, and then tried to explain their moral authority through sympathy with public utility. By locating sympathy in the imaginative response of an impartial spectator and the immediate feeling of the sense of resentment, Smith has offered an alternative to Hume’s account. Smith’s account maintains a much more rigorous separation of efficient from final causes. As such he can more legitimately claim that he has eliminated all teleological elements from the theory. Thus, utility, seen as the good of society, is the unintended, beneficial outcome of numerous individual actions. Smith explains these actions and the institutions which result (the

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laws of justice) on the basis of natural reactions of individual agents to specific events. They can develop Humean conventions, which have the effect of preserving and prospering society without having foreknowledge that such will be the result. Smith’s observation about the division of labour has general validity. People can only know that these conventions are useful to them collectively after they have first experienced them. This is the system Smith had already explained to his students. The theory of the origin of property rights is simply an application of his general theory of social order. It operates within the framework of Hume’s empiricism in that agents are assumed to acquire knowledge from experience. There can be no ideas in the mind without prior impressions from the senses. These include the feelings, such as resentment and the pleasure of mutual sympathy, which arise in the mind as the result of engaging in the impartial spectator process. Property is fundamentally an idea, as is the moral quality people attach to it. Feelings of resentment and the pleasure of sympathy are the impressions that give rise to the idea. As such, Smith’s theory, like Hume’s, is couched in terms of the development of the human mind. Using the association of ideas, Smith goes on to show how property rights evolve as human society progresses through the four stages of hunting, pasturage, agriculture, and commerce. By way of contrast, consider a new institutional treatment of first possession. Lueck, asserts that ‘Behind every system for establishing property rights lies the basic notion of first possession’ (Lueck 2003: 200). While he points out the ubiquity of first possession rules in human life, he goes on to examine their economic rationality, not their origin. Thus, the prevention of rent dissipation either through the inefficient utilization of resources in the race to acquire rights to resource stocks or through the inefficient race to capture resource flows where stocks are unowned, are used to explain rules of first possession: ‘Under these conditions, potential claimants will compare the present value of the flow of output less the variable costs of production to the present value of the costs of establishing and enforcing property rights’ (Lueck 2003: 203). Not only are agents assumed to know these present values ahead of time, they also are fully aware of the concept of property itself. In terms of the language of efficient and final cause, Lueck does precisely what Smith says one should not do: treat final causes (in this case the maximization of utility or wealth) as the efficient cause (why rules of first possession develop in the first place). It is in this sense that I claim new institutional theories are highly teleological. Moreover, to the extent that the end result can be seen as economically rational, it is the assumption of rationality in the individual agent that insures this result. While I would not want to claim that Smithian agents are not capable of such rationality, it is clear that he does not rely on it to explain the origin of property rights. Smithian agents build up a stock of knowledge about the world inductively. Each may be rational within a certain sphere of personal experience, but socially rational results, such

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as the emergence of a set of rules constituting, for example, the exclusive privilege of property rights, can only emerge, at least originally, as the result of the unintended consequences of individual actions. The ability to calculate Lueck’s present values can explain neither the first appearance of a rule of first possession nor its ubiquity in human life. Smith’s theory of moral sentiments can. This is a clear example of Vernon Smith’s contrast between constructivist rationality and ecological rationality. An implication of Smith’s theory is that selection in favour of rules that enhance social life occurs at the social level. As all mutations in natural selection may not work, Smith does believe that rule selection at the social level may also at times be perverse. This aspect of the theory is not well developed, but there are at least some hints in his treatment of the influence of custom and tradition on the sentiments of moral approbation. Consider Smith’s analysis of the practice of infanticide in the ancient world: 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 throw down its 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. (TMS V.2.15; emphasis added) Smith treats this as a clear perversion of the moral sentiments, which may at one time have been ‘excusable’ on the grounds of necessity. Once the original justification no longer applies, though, the ‘barbarous’ practice persists because it has become customary to allow it. In this way pathological rules and practices may persist in society as long standing customs. He goes on to conclude, though, that: There is an obvious reason why custom should never pervert our sentiments with regard to the general style and character of conduct and

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Those societies that develop proper rules of justice will be the ones that thrive. Those that do not will cease to exist. This further implies a sort of natural selection among rules and conventions at the social level that favour justice and economic efficiency.6,7 Thus, in Smith’s theory rationality emerges at the social level as those societies that hit upon rules that create and preserve economic wealth will tend to thrive. Consider once again the evidence, discussed above, which Carlos and Lewis present concerning the depletion of the beaver population around Hudson’s Bay. New institutionalists do recognize that government may establish and protect property rights that are socially inefficient, but very profitable for particular groups (North and Thomas 1973: 8). However, the story Carlos and Lewis tell does not seem to be consistent with the constructivist version of the new economics of property rights theory reviewed here. Rent dissipation clearly seems to have occurred, and certain customs and beliefs among the natives are offered as the reason why the predicted result (definition and enforcement of property rights over the beaver) did not occur. A ‘big bill’ seems to have been left on the sidewalk. Smith’s theory, however, can at least offer some account of this in that he recognizes the possibility of efficiency-decreasing customs. At the same time he recognizes that this cannot be the general pattern. There will be a process of selection at the social level that will cause the evolution of efficiency-enhancing practices in the main. By placing his theory in the domain of the development of the mind, Smith seems to allow more scope for error, than does the new theory.

IV Conclusion David Hume and Adam Smith were the leading lights of the Scottish Enlightenment. As Christopher Berry has argued a characteristic feature of Scottish social theory was to view the progress of society in terms of the development of the human mind (Berry 1997). Hume famously stated the case in the introduction to THN: ‘Tis evident, that all the sciences have a relation, greater or less, to human nature; and that however wide any of them seem to run from it, they still return back by one passage or another’ (THN Intr. 4). Following Hume, Smith treats the origin and evolution of property rights as a philosophical problem. How do social conventions, the sole function of which is to promote social life, emerge from the actions and ideas of individuals who can have no prior knowledge of

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such socially beneficial consequences? Building on the theory of unintended social order Smith is able to give a plausible account of how the idea of property would emerge out of sentiments that bear no relation to the resultant social function of property. The theory bears some resemblance to modern theory in that they both start from the facts of scarcity and limited benevolence as inherent in the human condition. However, the resemblance is entirely superficial. The modern theory never gets beyond treating property rights as an economic problem: the reaction of rational individuals in the face of resource scarcity. For Smith it would be a clear case of the confusion between efficient and final cause he warned his readers to avoid. Moreover, rationality for Smith, in the sense of arrangements that tend to maximize social utility (or wealth), emerges at the social level in an evolutionary process of selection. He does not need to assume that individual agents are as rational and well-informed as does the contemporary theory. It is an amusing historical irony that Smith’s theory of unintended social order, which lies behind the invisible hand metaphor, could be used to expose serious problems in the new institutional economics of property rights. In attempting to offer an account that makes property rights endogenous, new institutionalists are operating within what they conceive of as the framework of the invisible hand: rational, self-interested actions of individual agents bring about unintended social benefits. However, the model of human agency with which they work requires them to put all the important stuff into the assumptions. While the model yields interesting insights into the historical evolution of property rights, ultimately it seems to be completely silent on the primordial origin of property rights as an idea with moral sanction. The power of Smith’s account is that it can do this while also accounting for the way property rights help society cope with the problem of scarcity.

Acknowledgement I wish to thank Elias Khalil for helpful comments on a previous version. The usual disclaimer applies.

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Transferability is also discussed as an important attribute of property rights. However, further discussion is beyond the scope of the present paper. (For example, see Umbeck 1977: 197.) The Lockean influence on Smith’s theory of property is still open to alternative interpretations. Eric Schliesser’s excellent paper in this volume attests to the fact that it is possible to develop a plausible, sophisticated Lockean interpretation of Smith starting from the above quoted passage in WN (Schliesser 2006). While I continue to hold to my previously published views that Smith’s spectator-based theory is advanced as an alternative to Locke, this is not the place to attempt a rebuttal. I do agree with Schliesser that Smith’s historical discussion, along with

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Jeffrey T. Young the primordial origins analysis I discuss in the next part, are constitutive of the normative force Smith attached to the idea of property rights. Moreover, I think this also separates Smith from the new institutional theories outlined above, as it underscores another dimension of my argument that for Smith the origin and development of property rights is a philosophical problem. West’s interpretation of Smith’s third duty of the sovereign is beyond the scope of this paper. Nothing I have to say about Smith hinges on whether West is right or wrong. A fuller discussion of his position is found in West (1990). I have developed the argument at greater length in another manuscript (Young 2004). In that manuscript I show, I hope conclusively, Smith’s use of Hume’s principle of the association of ideas in his discussion of the evolution of property rights. This coupled with the well-known fact that Smith’s moral theory developed, at least in part, as a critique of Hume’s utilitarianism, establishes the important connections between the two, which I assume in this paper. LJB refers to the Report of Smith’s lectures on Jurisprudence dated 1766, included with LJA in Smith (1978). WN is full of examples of customs that have become codified into laws that reduce economic efficiency. Primogeniture and entails are prime examples, as they prevent land from falling into the hands of those who can best develop its economic potential: Compare the slow progress of those European countries of which the wealth depends very much upon their commerce and manufactures, with the rapid advances of our North American colonies, of which the wealth is founded altogether in agriculture. Through the greater part of Europe, the number of inhabitants is not supposed to double in less than five hundred years. In several of our North American colonies, it is found to double in twenty or five-and-twenty years. In Europe, the law of primogeniture, and perpetuities of different kinds, prevent the division of great estates, and thereby hinder the multiplication of small proprietors. A small proprietor, however, who knows every part of his little territory, who views it with all the affection which property, especially small property, naturally inspires, and who upon that account takes pleasure not only in cultivating but in adorning it, is generally of all improvers the most industrious, the most intelligent, and the most successful. (WN III.iv.19)

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Douglass North has remarked that ‘There is nothing automatic about the evolving conditions that will permit low-cost transacting in the impersonal markets that are essential to productive economies’ (North 1994: 365; also 1991). Similarly Vernon Smith is quite clear that the selection process is one of ‘trial-and-error’ (V. Smith 2003: 500). These remarks suggest that there is an alternative stream of new institutionalist thought, which in many ways comes closer to adopting the ecological rationality approach that Smith and Hume pioneered. However, it is beyond the scope of the present paper to investigate this stream and its relation to Smith.

Bibliography Alchian, A.A. (1977) [1965] ‘Some economics of property rights’, in Economic Forces at Work, Indianapolis: Liberty Press. Anderson, T.L. and Hill, P.J. (1975) ‘The evolution of property rights: a study of the American West’, Journal of Law and Economics, 18: 163–80.

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–––– (1977) ‘From free grass to fences: transforming the commons of the American West’, in Managing the Commons, G. Hardin and J. Baden (eds), San Francisco: Freeman. –––– (2003) ‘The evolution of property rights,’ in Property Rights: Cooperation, Conflict, and Law, T.L. Anderson and F.S. McChesney (eds), Princeton: Princeton University Press. Barzel, Y. (1997) Economic Analysis of Property Rights, 2nd edn, Cambridge: Cambridge University Press. Berry, C.J. (1997) Social Theory of the Scottish Enlightenment, Edinburgh: Edinburgh University Press. Carlos, A.M. and Lewis, F.D. (1999) ‘Property rights, competition, and depletion in the eighteenth-century Canadian fur trade: the role of the European market’, Canadian Journal of Economics, 32: 705–28. Cheung, S. (1974) [1970] ‘The structure of a contract and the theory of a nonexclusive resource’, in The Economics of Property Rights, E.G. Furubotyn and S. Pejovich (eds), Cambridge, MA: Ballinger. Demsetz, H. (1964) ‘The exchange and enforcement of property rights’, Journal of Law and Economics, 7: 11–26. –––– (1967) ‘Toward a theory of property rights’, American Economic Review, 57: 347–59 (P&P). –––– (1975) [1966] ‘Some aspects of property rights’, in The Economics of Legal Relationships, H.G. Manne (ed.), St. Paul: West Publishing Company. Dennis, R.T. (1976) ‘Cattlemen’s associations and property rights in land in the American West’, Explorations in Economic History, 13: 423–36. Forbes, D. (1975) Hume’s Philosophical Politics, Cambridge: Cambridge University Press. Furubotyn, E.G. and Pejovich, S. (1974) ‘Introduction: the new property rights literature’, in The Economics of Property Rights, E.G. Furubotyn and S. Pejovich (eds), Cambridge, MA: Ballinger. Gordon, H.S. (1954) ‘The economic theory of a common-property resource: the fishery’, Journal of Political Economy, 62: 124–42. Haakonssen, K. (1981) The Science of a Legislator: The Natural Jurisprudence of David Hume and Adam Smith, Cambridge: Cambridge University Press. Hume, D. (1975) [1777] Enquiries Concerning Human Understanding and Concerning the Principles of Morals, 3rd edn, L.A. Selby-Bigge (ed.), revised by P.H. Nidditch, Oxford: Clarendon Press. –––– (2000) [1739,1740] A Treatise of Human Nature, David Fate Norton (ed.), Oxford: Oxford University Press. Knight, F.H. (1924) ‘Some fallacies in the interpretation of social cost’, Quarterly Journal of Economics, 38: 582–606. Livingston, D.W. (1984) Hume’s Philosophy of Common Life, Chicago: University of Chicago Press. Lomborg, B. (2001) The Sceptical Environmentalist, Cambridge: Cambridge University Press. Lueck, D. (2003) ‘First possession as the basis of property rights’, in Property Rights: Cooperation, Conflict, and Law, T.L Anderson and F.S. McChesney (eds), Princeton: Princeton University Press. North, D.C. (1991) ‘Institutions’, Journal of Economic Perspectives, 5: 97–112.

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–––– (1994) ‘Economic performance through time’, American Economic Review, 84: 359–68. –––– and Thomas R.P. (1973) The Rise of the Western World: A New Economic History, Cambridge: Cambridge University Press. Pejovich, S. (1975) [1972] ‘Towards an economic theory of the creation and specification of property rights’, in The Economics of Legal Relationships, H.G. Manne (ed.), St. Paul: West Publishing Company. Schliesser, E. (2006) ‘Articulating practices as reasons: Adam Smith on the social conditions of the possibility of property’, The Adam Smith Review, 2: 69–97. V. Brown (ed.), London: Routledge. Smith, A. (1976a) The Theory of Moral Sentiments, D.D. Raphael and A.L. Macfie (eds), Oxford: Clarendon Press; reprinted, Liberty Press (1982). –––– (1976b) An Inquiry into the Nature and Causes of the Wealth of Nations, A.S. Skinner and R.H. Campbell (eds), Oxford: Clarendon Press; reprinted, Liberty Press (1981). –––– (1978) Lectures on Jurisprudence, R.L. Meek, D.D. Raphael and P.G. Stein (eds), Oxford: Clarendon Press; reprinted, Liberty Press (1982). Smith, V.L. (2003) ‘Constructivist and ecological rationality in economics’, American Economic Review, 93: 465–508. Umbeck, J. (1977) ‘The California gold rush: a study of emerging property rights’, Explorations in Economic History, 14: 197–226. –––– (1981) ‘Might makes right: a theory of the formation and initial distribution of property rights’, Economic Inquiry, 19: 38–59. West, E.G. (1990) Adam Smith and Modern Economics, Cheltenham: Edward Elgar. –––– (2003) ‘Property rights in the history of economic thought: from Locke to J.S. Mill’, in Property Rights: Cooperation, Conflict, and Law, T.L. Anderson and F.S. McChesney (eds), Princeton: Princeton University Press. Winch, D. (1978) Adam Smith’s Politics: An Essay in Historiographic Revision, Cambridge: Cambridge University Press. Young, J.T. (1995) ‘Natural jurisprudence and the theory of value in Adam Smith’, History of Political Economy, 27: 755–73. –––– (1997) Economics as a Moral Science: The Political Economy of Adam Smith, Cheltenham: Edward Elgar. –––– (2004) ‘The Humean foundations of Adam Smith’s theory of property rights’, unpublished manuscript.

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I Introduction and summary In this essay, I attribute to Adam Smith the insight that explaining the historical origins and social conditions of possibility of social phenomena is part of the moral force of our practices. The importance of my investigation goes beyond a narrow interpretation of Smith. The approach I develop here can, for example, be applied to a very different moral philosopher, J.S. Mill, whose methodology in Chapter III of Utilitarianism, is very similar to the one I attribute to Smith. Moreover, Smith’s position is a useful response to an anti-historical strain of moral theorizing arising out of the now dominant neo-Kantian, Rawlsian contract tradition. Smith provides an example of how an interest in genealogical origins need not end up in the service of (Rousseau-ian, Nietzsche-ian, Foucault-ian) unmasking of morality. My paper diagnoses and then resolves a tension in Adam Smith’s political and moral theory as presented in his published works, An Inquiry Concerning the Nature and Causes of the Wealth of Nations and The Theory of Moral Sentiments. First, I show that Smith supports a very thin, egalitarian conception of original property rights; I call these ‘Lockean’ only to emphasize that a conception of property is possible prior to foundation of justice, not to claim that Smith endorses Lockean social contract theory (Khalil 1998). Whatever the source of this right, Smith is adamant that it should be protected. Nevertheless, the same protection is not due to derived property rights. In TMS and WN, Smith offers a story of the development of social institutions of derived property. But it is by no means obvious why a right requires such a historical account. Faced with this tension, one might be tempted by two strategies. First one could argue that Smith’s explanation is, in the tradition of David Hume, a form of justification. Christine Korsgaard (1996) has labelled this strategy ‘reflective endorsement’. Second, one could simply argue that, in Smith, the naturalistic account plays no role in defending the normative force of the right. The account is simply offered when Smith speaks as a kind of value-free modern ‘social scientist’. Even if it were, all things

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considered, the most plausible textual interpretation, I argue that it ignores a potential, philosophically fruitful alternative: Smith’s insistence on presenting the historical and social conditions of possibility of our rights is evidence that he believes that such articulation is constitutive of continuing existence of such rights for us. So I defend a version of the first strategy, although I emphasize that the details of Smith’s approach set him apart from Hume in many important ways. In section II, I summarize Smith’s naturalized approach to property. In section III, I explain how Smith’s criticism of Hume’s moral psychology may prevent him from holding a Humean ‘reflective endorsement’ position about justice. In Section IV, I examine four possible reasons that can explain Smith’s turn to history. The upshot of my argument is that the naturalistic development of social institutions of derived property, and their articulation in our practices and theorizing, is constitutive of the normative force of these institutions – even if we accept the contingency, fallibility, and potential revisability of our best scientific theories.1 I explain this with reference to Smith’s emphasis on the discursive elements in the workings of the impartial spectator. The argument of this paper is, where possible, sustained by evidence from Smith’s published writings. While my argument is often compatible with the evidence we have from the student notes to his lectures on jurisprudence (Smith 1978), this ends up supporting a very different interpretation of Smith’s approach to justice (cf. Young 2006). I offer arguments why Smith may have abandoned some of the views that he presented in the lectures. But I also offer a kind of rational extension of Smith’s position. Even if it turns out that Smith did not actually hold the positions that I attribute to him, reflection on his approach offers a way to appreciate why explaining ethical phenomena and their preconditions in naturalistic terms makes possible our ethical practices. Moreover, what I call the Enlightenment Imperative demands such explanations from us.

II Smith’s naturalistic Lockean account of property2 In this section, I describe Smith’s conception of property rights and, second, his account of its origin. II.A Smith on the foundation of property In the context of a critical discussion on attempts to prevent competition by guild and apprenticeship laws and so on, Smith echoes Locke: 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

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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. (WN I.x.c.12) Smith’s conception of property rights is, however, narrower than Locke’s. In the passage not all property is called ‘most sacred and inviolable’, but only ‘the property which every man has in his own labour’. This implies that different kinds of property, however sacred, may have differing range of (weaker) protection accorded to them. Guild members, for example, would have thought of guild laws as protecting their sacred and inviolable rights, also perhaps as part of the fundamental order of society, so Smith’s rhetoric is no doubt carefully chosen. Unlike Locke, however, Smith tends to avoid the language of rights.3 He uses it very sparingly in his published works, WN and TMS. Smith does call property rights ‘sacred’ at WN I.xi.c.274 and less clearly at WN IV.vii.b.44.5 Moreover, Smith’s conception, with its emphasis on the work performed by a poor person’s hands (cf. WN I.ii.40), is quite narrow. Here I focus on Smith’s claim that ‘the property which every man has in his own labour . . . is the original foundation of all other property’. It appears that the normative force of the claim of any form of ownership is (potentially) available to each of us: the claim is derivable from everyone’s labour.6 If we leave aside, for the sake of argument, the disabled, this is an egalitarian conception, especially in light of Smith’s use of a ‘poor man’. It provides supporting evidence for Sam Fleischacker’s interpretation of Smith’s moral egalitarianism (Fleischacker 2004: ch. 4.16.)7 Smith’s claim differs from Locke’s conception in an additional, subtle fashion. Smith does not appeal to an original state of nature to found the claim. The ‘foundation of all other property’ is available to us to this day (note Smith’s use of ‘has’ and ‘is’). There is no need to tell a justificatory story about ancient (or fictive) origins of property rights. If this is so, this might help explain why Smith never appealed to his impartial spectator theory in describing a state of nature construct in his published writings. Of course, the use of ‘original’ may bring to mind Locke’s founding story and others like it, but in context it need not do so. Smith’s claim is intelligible without it. Smith could be saying that, while we inherit a world full of property arrangements, each of us is – if we (can) labour – a moral source of our property. Nevertheless, in WN, one does find an account of the development of property arrangements, and it is closer to Locke’s picture than that of Hobbes or Hume. But at first glance, this story plays no justificatory role in Smith’s thought.

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II.B The genealogy of property In WN, Smith offers the following account of the origin of property; I quote in full before I comment on the passage: Among nations of hunters, as there is scarce any property, or at least none that exceeds the value of two or three days labour, so there is seldom any established magistrate or any regular administration of justice. Men who have no property can injure one another only in their persons or reputations. But when one man kills, wounds, beats, or defames another, though he to whom the injury is done suffers, he who does it receives no benefit. It is otherwise with the injuries to property. The benefit of the person who does the injury is often equal to the loss of him who suffers it. Envy, malice, or resentment are the only passions which can prompt one man to injure another in his person or reputation. But the greater part of men are not very frequently under the influence of those passions, and the very worst of men are so only occasionally. . . . Men may live together in society with some tolerable degree of security, though there is no civil magistrate to protect them from the injustice of those passions. But avarice and ambition in the rich, in the poor the hatred of labour and the love of present ease and enjoyment, are the passions which prompt to invade property, passions much more steady in their operation, and much more universal in their influence. Wherever there is great property there is great inequality. For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy, to invade his possessions. It is only under the shelter of the civil magistrate that the owner of that valuable property, which is acquired by the labour of many years, or perhaps of many successive generations, can sleep a single night in security. He is at all times surrounded by unknown enemies, whom, though he never provoked, he can never appease, and from whose injustice he can be protected only by the powerful arm of the civil magistrate continually held up to chastise it. The acquisition of valuable and extensive property, therefore, necessarily requires the establishment of civil government. Where there is no property, or at least none that exceeds the value of two or three days labour, civil government is not so necessary. (WN V.i.b.2) Smith’s account presupposes his four stages of civilization, itself an elaboration and extension of Hume’s sketch of a three-stage model in ‘Of Commerce’ (Hume 1985: 256):8 those based on hunting, herding, agriculture, and manufacture (WN V.i.a; see Meek 1976, 1977; Skinner 1996).

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Each stage is, for Smith, distinguished by a predominant form of socioeconomic organization. Smith thought that ‘progress’ from one stage to the next was the ‘natural course of things’. On the whole, Smith thought it was better to advance to a higher stage, but he was aware that important moral qualities (say, magnanimity, courage and self-command) could be lost in the transition. Moreover, he vigorously combated the idea, promoted by Hume (‘Of Refinement in the Arts’, Hume 1985: 271), that advanced societies always exhibit more ‘humanity’ (TMS V.2.9). Smith did not believe that it was inevitable that one moved from one stage to the next, nor that all stages needed to be passed through (WN III.i.3; Schliesser 2005a). Note, first, that Smith agrees with Locke and against Hobbes and Hume that there can be some property before there is justice. Within a broadly Humean framework of moral psychology and the evolution of human institutions, Smith severs the intimate connection that Hobbes and Hume made between justice and property.9 Unlike Hobbes and Hume, for Smith justice is not a necessary condition of property. Nevertheless, he assumes that in a hunting society, property will always be fairly limited. Thus, there will be very limited incentive to set up an administration of justice. Second, Smith recognizes harms to one’s frame of mind, body, and property (cf. Hume’s Treatise 3.2.2.7). According to Smith, in a hunting society, men can harm each other’s reputation and person. In affirming the former, Smith disagrees with Hume, for whom we ‘are perfectly secure in the enjoyment’ in the internal satisfaction of the mind.10 But, while ‘Envy, malice, or resentment’ may prompt us to injure others, according to Smith, there is little reason to expect this to happen very often because in a hunting society we are not frequently ruled by these passions (in this Smith agrees with Hume, Treatise 3.2.2.12). There is little ‘interest’ to be derived from inflicting such harm.11 In a hunting society, then, there will be no need for the rule of law or extensive property-rights because there is little or no harm that needs to be prevented by it. Therefore, ‘Men may live together in society with some tolerable degree of security, though there is no civil magistrate to protect them from the injustice of those passions’.12 Before one assumes that he ascribes entirely to what Hume calls the poetic ‘fiction of the golden age’ (Treatise 3.2.2.15), Smith only speaks of a ‘tolerable degree of security’. This accords well with his criticism of Rousseau in his earliest publication, his ‘Letter to the Edinburgh Review’. Smith finds Rousseau’s description of life in the state of nature one-sided: ‘Mr. Rousseau, intending to paint savage life as the happiest of any, presents only the indolent side to view’; according to Smith, Rousseau leaves out the ‘most dangerous and extravagant adventures’ (Smith 1980, ‘Letter to ER’, para. 12, and ‘Astronomy’ III.1–2.). This attack on one-sidedness recurs; Smith’s main criticism of other moral philosophers is precisely that their systems are also ‘derived from a partial and imperfect view of nature’ (TMS VII.i.1).

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For Smith, law develops when there is an interest in it. Smith thinks an ‘advantage’ in harming others can only arise when there is more extensive and unequal property distribution. This cannot occur in a hunting society, and only comes about after a major change; shepherding must become a predominant form of social organization (WN V.i.b.12). Now, even in this stage, it may take considerable time before formal rules of justice are developed; not only must inequality arise, but, at first, this inequality will enable the rich to have a ‘natural authority over all the inferior shepherds or herdsmen of his horde or clan’ (V.i.b.11).13 Yet, eventually, ‘avarice and ambition in the rich’ and ‘hatred of labour and the love of present ease and enjoyment’ as well as the sheer ‘indignation’ and ‘envy’ in the needy poor make another person’s property a tempting target. In Smith’s view, the poor and rich are motivated by very different passions. While for Hume greed is the prime cause of the origin of the convention of law (Treatise 3.2.2.12), Smith only assigns it a partial cause in the smallest (for ‘one very rich man there must be at least five hundred poor’), albeit most powerful, part of society. Unlike Hume, Smith does not offer an explanation drawn in terms of a single passion here. In this, Smith is merely following Hume’s methodological advice in avoiding a ‘love of simplicity’ in explaining human affairs (second Enquiry, Appendix 2 ‘Of Self-love’). Moreover, Hume’s account gives the impression that the rule of law is in the interest, both initially as well as thereafter, of everybody. It is true that Smith thinks the rich and the poor both eye each other’s property, so both could benefit from order following its establishment. Nevertheless, he has no doubt that ‘Civil Government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all’ (WN V.i.b.12). After all, at V.i.b.2, Smith only singles out the rich man’s night-time security! But this account raises the question why, for Smith, to be law-abiding is moral at all if it is so clearly partial to the needs of the rich? Smith, too, is not blind to the widespread benefits of order that law entails (WN II.i.30, V.iii.7). Nevertheless, Smith’s attack on Hume’s account of the moral authority of utility undercuts Smith’s ability to point to the benefits of the rule of law as a source of our moral obligations to obey the law; at best it is of secondary importance: ‘it is seldom this consideration which first animates us’ against ‘licentious practices’ (TMS II.ii.3.9). Although we are often tempted to use and distinguish between efficient and final causes in our description of the phenomena of nature, and it is often quite natural to do so, we (moderns) know we can account for them with efficient causes. When we contemplate human affairs, however, we find it much more difficult to distinguish between efficient and final causation. Hume’s picture, while the product of ‘a refined and enlightened reason’, is erroneous because it imputes to reason ‘the sentiments and actions by

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which we advance those ends’ that are really the product of ‘natural principles’ (TMS II.ii.3.5).14 Smith has recourse to a different story.15 ‘The moment injury begins’, Smith writes, ‘the moment that mutual resentment and animosity take place, all the bands of [society] are broke asunder, and the different members of which it consisted are, as it were, dissipated and scattered by the violence and opposition of their discordant affections’. Now, Smith has no illusions about people: ‘the misery of one, who is merely their fellow creature, is of so little importance to them in comparison even of a small convenience of their own’ (TMS II.ii.3.3). Nevertheless, he thinks that ‘when a single man is injured, or destroyed, we demand the punishment of the wrong that has been done to him, not so much from a concern for the general interest of society, as from concern for that very individual who has been injured’. For Smith, this concern is not produced by ‘love, esteem, and affection’. Instead, all that is required ‘is no more than the general fellow-feeling which we have with every man merely because he is our fellow-creature’. Through process of sympathy, ‘we enter into the resentment even of an odious person, when he is injured by those to whom he has given no provocation’ (TMS II.ii.3.10).16 Our moral approval of just punishment originates in our feeling of common humanity coupled with our ability to imagine, as impartial spectators, the natural resentment and hence the propriety (I.ii.3.8) of retaliation by the victim. (For a subtle discussion of Smith’s account of propriety, see Montes 2004.) For Smith, just as meritorious acts warrant gratitude and deserved rewards, acts of demerit warrant resentment and deserved punishment. (Thus, Smith’s views of justice and injustice are not merely concerned with propriety, see Darwall 1999.) As Smith explains: ‘Actions of hurtful tendency . . . seem alone to deserve punishment; because such alone are the approved objects of resentment, or excite the sympathetic resentment of the spectator’ (TMS II.ii.1.2). Thus, as opposed to Hume, for Smith our moral approval of justice is not primarily derived from its utility (to ensure, say, public order). Rather this approval arises because we resent injury and naturally sympathize with the resentment of others (Campbell 1971: 186–204). Resentment, ‘derived from the imagination’, is for Smith one of the ‘unsocial passions’ (TMS I.ii.3.1). Now, the term ‘unsocial passion’ is potentially misleading. Smith does not deny that resentment is one of the glues that can hold society together (I.ii.3.4), although it can also be destructive (II.ii.3.3). All he means to say is that in order to get approval for one’s resentment one often must moderate its expression (in his terms: bring it down a pitch) from what would be the case in one’s ‘undisciplined nature’. Moreover, he thinks there is always something about ‘unsocial’ passions that ‘disgusts us’, so we need to know the cause first before we can sympathize with it (I.ii.3.5). Nonetheless, resentment ‘seems to have been given us by nature for defence, and for defence only’ (II.ii.1.4; emphasis added). Our resentment makes possible, even prior to the establishment of the rule of

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law, our desire for retaliation, which ‘seems to be the great law which is dictated to us by Nature’ (II.ii.i.10) and this sentiment undergirds later systems of justice. Thus, according to Smith: In order to enforce the observation of justice, therefore, Nature has implanted in the human breast that consciousness of ill-desert, those terrors of merited punishment which attend upon its violation, as the great safe-guards of the association of mankind, to protect the weak, to curb the violent, and to chastise the guilty. (TMS II.ii.3.4) Smith asserts that ‘consciousness of ill-desert’ has been put by nature not in our brain or in our reason, but in our breast. While Smith hedges his bets a bit (note his repeated ‘seems’), this suggests that he considers resentment and our occasional desire for retaliation an innate or natural passion.17 This is compatible with the view expressed in WN, where ‘resentment’ is already present in a hunting society, which is the earliest stage of development (V.i.b.2). Resentment can in some circumstances be ‘generous and noble’ (TMS I.ii.3.8), it can also be bad; the effects of resentment need to be restrained by justice or otherwise society will perish (TMS II.ii.3.3). Steve Darwall (2004) has rightly emphasized that for Smith resentment is a call for respect. For example, the object of resentment is: chiefly intent upon, is not so much to make our enemy feel pain in his turn, as . . . to make him sensible that the person whom he injured did not deserve to be treated in that manner. What chiefly enrages us against the man who injures or insults us, is the little account which he seems to make of us (TMS II.iii.1.5) It is, thus, intimately linked with Smith’s moral egalitarianism. Smith agrees with Hume that resentment arises from an original instinct. (Hume limits its presence to those that have a ‘warm concern for the interests of our species’, second Enquiry 5.2.39.) But Smith denies Hume’s suggestion (second Enquiry 3.2.40) that justice is either the result of reflection (recall TMS IV.2.12) or an original instinct. For Smith this is a false choice. Paradoxically, for Smith, the same passion, resentment, that can destroy society (TMS II.ii.3.3) is required to get the social institution of justice, enabling increasingly complex societies, off the ground.18

III The problem of history It is somewhat surprising that Smith would offer an account of the origin of property at all. His explanation of the ‘foundation’ of property (recall WN I.x.c.12) does not require it. Moreover, if there is a conception of

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‘sacred and inviolable’ property possible prior to the foundation of society, and that conception stems from some antecedently existing right (however derived), then while it is a contingent affair what social institutions of property actually look like, it is not a contingent affair that some claims of property have normative force. This separates the normative force of such a claim from its ‘naturalistic’ genealogy or development. One may think this renders all such naturalistic stories beside the point. For such explanations never have normative force, if such force derives from the right in question. Moreover, Smith’s modification of Hume’s approach runs into an additional problem. Christine Korsgaard points out that for Hume, ‘reflection on the origin of our moral sentiments only serves to strengthen those sentiments. The moral sense approves of its own origins and workings and so approves of itself ’ (Korsgaard 1996: 63).19 Korsgaard’s conclusion may appear surprising because for Hume it is our greed that is the prime cause of the origin of the convention of law: it is only by ‘establishing the rule for the stability of the possession, that this passion restrains itself’ (Treatise 3.2.2.14). Nevertheless, Hume insists that the moral obligation that justice can command is derived from its utility to society (second Enquiry 3.1.13). He explains in the Treatise that after the interest in the law is:

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establish’d and acknowledge’d, the sense of morality in the observance of these rules follows naturally, and of itself; tho’ ‘tis certain, that it is also augmented by a new artifice, and that the public instructions of politicians, and the private education of parents, contribute’ to a sense of duty involved in observing property rights. This is supported by the ‘pleasure’ we receive ‘from the view of such actions as tend to the peace of society, and an uneasiness from such as are contrary to it. (Treatise 3.2.6.11; see also second Enquiry, ch. 5)

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For Hume, the origin of and continuing adherence to justice, as ‘a whole plan or scheme’ (Treatise 3.2.2.22), are founded on its perceived utility to society as well as the pleasure this brings us. The utility consists mainly in the ‘peace and order’ it establishes in society (3.2.2.22; also 3.2.2.14). Korsgaard calls this ‘sympathy with the public interest’ (Korsgaard 1996: 86); this expression nicely captures Hume’s position. So, while justice may have its origin in an attempt to constrain the effects of the unappealing sentiment of greed, our moral approval is sustained by the pleasing sensation of perceiving the utility of the convention. This pleasing sensation, however weak, creates an additional interest to be the kind of person who practises virtue for its own sake (Korsgaard 1996: 60). Korsgaard summarizes the character of Hume’s position: ‘if practical philosophers can get people to accept the claims of morality simply by telling them the truth about the nature of morality, then the claims of

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morality are justified’ (1996: 54). Hume’s account meets this requirement. Thus, it provides, what Korsgaard calls ‘reflective endorsement’ (1996: 61). ‘The anatomy of morality is lovely enough to withstand our gaze, and so the practical philosopher need only paint the truth’ (Korsgaard 1996: 82). In fact, Korsgaard understates why Hume’s account attains reflective endorsement: for Hume, the system of justice is a human artifice, so reflection on it allows us to be pleased by our joint (even if unintended) achievement: ‘Tis the combination of men, in a system of conduct, which renders any act of justice beneficial to society’ (Treatise 3.3.6.4). It is part of Hume’s anti-religious philosophic programme (this account does not require a divinely inspired or authorized legislator) for commercial society that values an independence not based on a classical ideal of selfsufficiency, but on mutual interdependence. While Smith is also committed to mutual interdependence (Berry 1989, 1992; Schliesser 2006), Smith’s attack on Hume’s account of the moral authority of utility (recall treatment of TMS II.ii.3 above) undercuts Smith’s ability to point to the benefits of the rule of law as a source of our moral obligations to follow the law; it also appears to deprive Smith of reflective endorsement. For Smith the natural sentiment of resentment, and not utility, is the original source of adherence to justice. Even if one is sympathetic to Smith’s attack because considerations of utility seem to be reasons of the wrong kind to support a claim of right or justice, on Smith’s account the anatomy of morality is not lovely, but potentially disgusting (recall TMS I.ii.3.5). One may ask with Hume: Why dig up the pestilence from the pit in which it is buried? The ingenuity of your researches may be admired, but your systems will be detested; and mankind will agree, if they cannot refute them, to sink them, at least in eternal silence and oblivion. (second Enquiry 5.2.1)20 Nevertheless, the actual and immediate moral approval with which TMS was received, suggests that Smith’s account of the origin of morality may have attained reflective endorsement anyway. (For a very different approaching at interpreting Smith as offering a reflective endorsement account, see Fleischacker 2002.) It is, of course, possible that the complex rhetorical presentation of Smith’s theory fooled most of his contemporary readers; on this account, only a philosophic reader, for example, his contemporary, Thomas Reid, would suspect that Smith is a Hobbesian (Stewart-Robertson and Norton 1980, 1984).21 Leaving aside this issue here, I speculate that Smith’s readers find TMS lovely because for Smith (imagined) mutual sympathy is always pleasing (TMS I.ii). As Hume points out, this is the ‘hinge’ of Smith’s system. Hume is quite critical of this claim. Hume thinks it is empirically false (Hume’s Letter, 28 July 1756, in Smith 1987, Corr. Letter 36; Raynor 1984). If we assume Smith’s

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position (without prejudicing the outcome of this empirical matter22) then there may be a route to reflective endorsement, after all. Smith is quite explicit that when we resent the injury of others this involves sympathy (TMS II.ii.1.2). This resentment is based on our feeling of common humanity (II.ii.3.10). In his essay, ‘Of the External Senses’, Smith links our ability to sympathize even with animals as a sign of some respect for them (Smith 1980, ‘External Senses’, para. 7). Whether the feeling of common humanity is, in Smith, the product of an original tendency to sympathize or, as I think more likely, presupposed in or even the cause of our imaginatively putting ourselves as spectators in the place of others (cf. TMS II.ii.3.4), need not be decided here. For, in Smith’s theory, our moral approval is sustained by the pleasing sensation of sympathizing with the resentment or imagined resentment of others. Moreover, Smith is adamant that not following the dictates of our conscience creates very unpleasant feelings (TMS III.ii.9). So this creates an additional interest to be the kind of person that practises virtue for its own sake. So, all the material for reflective endorsement is available to Smith. Yet, in contrast to Hume, Smith deprives us of being able to take full credit for the attainment of justice; it is, after all, derived from a natural sentiment of resentment (that, in practice, aids mostly the rich, see WN V.i.b.12). However, this natural sentiment, in turn, presupposes a tacit commitment to common humanity, and this can be a most lovely thought.23 So, this may tempt one to attribute to Smith a version of the reflective endorsement strategy. In Section IV.D, I explain why, despite this reconstruction, I am still hesitant to attribute to Smith the reflective endorsement strategy. But first we need to understand more fully Smith’s turn to a certain kind of history.

IV The turn to history In this section, I offer four reasons why Smith would have turned to history even in the context of his ethical/political theory. First, one may think that the content of the right is articulated by history. Second, the historical account provides a normative baseline with which to evaluate moral and social institutions. Third, the historical account does justice to an Enlightenment Imperative, one that demands non-miraculous, causal explanations for our practices. Finally, the historical account enables a moral theory in which explanation and justification are mutually reinforcing. The four reasons represent independent strains in Smith’s thought, but they form part of a cumulative argument. IV.A Determining the right

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Even if one thinks that property rights are self-evident or bedrock, the content and extent of the right needs to be established. Recall that at WN

80 Eric Schliesser I.x.c.12, Smith claims that we have property in our labour. Our manual actions/doings are the original source of property, from which other forms of property are derived. Smith’s history (recall WN V.i.b.2) reaffirms that we recognize property prior to establishment of civil law, which, in turn, is result of growth of inequality. So, the genealogy reinforces the thought that a right to our original property has an original ‘foundation’, especially in light of Smith’s moral psychology: our sympathy with resentment is a natural sentiment located in the breast. Smithian sympathy presupposes an egalitarian sense of common humanity (or least a biological aptitude to sympathize with other humans). Moreover, as we have seen, the bedrock meaning of original property is located in one’s manual labour, which is also egalitarian in spirit. This original labour enables the activities that facilitate growth of what we may call derived (as opposed to ‘original’) property. Smith’s history teaches that derived property is, as Hume emphasizes for all property, conventional. Presumably, we also sympathize when reasonable expectations about our derived property are violated (Smith 1978, LJA i.13–15, 17; Fleischacker 2004: 159, 191). Smith’s expression at WN I.x.c.12, indicates that the right to derived property is less sacred and inviolable. I suspect this is due to our recognition that while some barter and exchange can take place in the state of nature (WN I.ii.1), and involve some original property, most of the expansion of derived property is the result of the political circumstances of the existence of markets in modern society. Smith’s insistence in the famous butcher, brewer, baker passage that even beggars do not chiefly rely on the ‘benevolence’ of their ‘fellow-citizens’ (WN I.ii.2; emphasis added), is not an innocent phrase. Evidently, the beggar and the tradesman do not merely relate to each other (Fleischacker 2004: 91) as self-interested, interdependent merchants (I.iv.1) or consumers (WN IV.viii.49).24 There is also a political dimension. Our modern forms of exchange take place in a political context. This is why Smith can claim in his discussion of taxation: ‘Every tax, however, is to the person who pays it a badge, not of slavery, but of liberty’ (WN V.ii.b.3). As free people, we recognize that the size of and the right to our derived property is the product of our shared activities. So none of us can claim an inviolable, absolute right to all of our derived property. One can see in this, as Steve Darwall has urged on me, a reflective endorsement from the perspective of having an equal authority to make claims and demands on one another at all. Smith’s historical account of the four-stages teaches that each stage is characterized by specific property and other institutional arrangements, which, in turn, are suited to fit local needs. For, in WN, the historical account of the origin of property (V.i.b.2) is offered in the context of discussing the second duty of the sovereign, to establish an exact administration of justice. Smith’s history defends the thesis ‘that an exact administration of justice, requires . . . very different degrees of expense in the different periods of society’ (V.i.b.1). This parallels the reason Smith

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provides in explaining why he offers a brief history in analysing the first duty of the sovereign, that is, ‘protecting the society from the violence and invasion of other independent societies’. Smith uses the history to show that ‘the expense both of preparing this military force in time of peace, and of employing it in time of war, is very different in the different states of society, in the different periods of improvement’ (WN V.i.a.1). History can teach that the appropriate or reasonable cost of government is stage dependent. Of course, as society changes, the needs of society will change, too. Nevertheless, ‘[L]aws frequently continue in force long after the circumstances which first gave occasion to them, and which could alone render them reasonable, are no more’ (WN III.ii.4). There is, thus, considerable inertia, or, to use Bill Wimsatt’s phrase, generative entrenchment, in the institutions of society.25 So, for Smith the ‘reasonable’ content of derived property rights are a contingent matter determined by the needs and organization of historically specific societies. According to Smith, in shepherd and agricultural societies, justice is quite arbitrary. For example, in feudal times, the countryside was ravaged, while the cities and burghs only became the scene of order after the King decided to ally himself with them against the Barons (WN III.iii.11–12). For Smith, commerce creates conditions in which property rights become secure: [C]ommerce and manufactures gradually introduced order and good government, and with them, the liberty and security of individuals, among the inhabitants of the country, who had before lived almost in a continual state of war with their neighbours and of servile dependency upon their superiors. This, though it has been the least observed, is by far the most important of all their effects. Mr. Hume is the only writer who, so far as I know, has hitherto taken notice of it. (WN III.iv.4)26

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Smith thinks that in countries without commerce, surplus from land or in a shepherding society, cattle would be used by the rich to maintain idle retainers. Such retainers are a source of military power and, because of the feudal lords’ ambition, disorder. Only when the rich have the option to spend their surplus on vanity-satisfying goods and the number of retainers decreases, while the power of the king, who is the source of more regular administration of justice, would grow, could this disorder start to decrease (WN III.iv). Of course, there is a chicken and egg problem here. For:

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Commerce and manufactures can seldom flourish long in any state which does not enjoy a regular administration of justice, in which the people do not feel themselves secure in the possession of their property, in which the faith of contracts is not supported by law, and in

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Eric Schliesser which the authority of the state is not supposed to be regularly employed in enforcing the payment of debts from all those who are able to pay. Commerce and manufactures, in short, can seldom flourish in any state in which there is not a certain degree of confidence in the justice of government. (WN V.iii.9)

So, commerce leads to good order, yet some order is necessary for commerce to flourish. For Smith some trade can exist in the state of nature, but for extensive, flourishing trade to exist people need to feel secure in their property. The form of government that creates secure administration of justice is, however, itself the result of commercial society. Smith’s ‘solution’ to this problem is to insist that the growth of commerce is a ‘gradual’ and a ‘slow and uncertain’ process during the course of centuries (III.iv.10–23). He does not say so, but he implies that the growth of commerce and the rule of law can be a mutually reinforcing, concomitant process.27 For Smith, commerce and law are created through the reasonable expectations of people about the security of contracts and the regulation of creditor/debtor relations. In Smith’s Great Britain, property rights have come to be experienced as ‘sacred’ and ‘inviolable’ because they have been around for a long time and they have had a long-standing parliament and competing law courts (Trincado 2004) jealous to keep guard, however imperfectly, over their safety. They are, however, only a late development in the history of Western Europe. In the past, property rights were precarious and uncertain. Smith is aware, however, that a person, an institution, or a practice can be made to appear sacred in the eyes of the people even when it is not (WN V.i.g.6, 22–3). Moreover, Smith knows that in the case of corn (that is, edible seeds), protecting property rights is less than ‘sacred’ in practice: The laws concerning corn may everywhere be compared to the laws concerning religion. The people feel themselves so much interested in what relates either to their subsistence in this life, or to their happiness in a life to come, that government must yield to their prejudices, and, in order to preserve the public tranquility, establish that system which they approve of. It is upon this account, perhaps, that we so seldom find a reasonable system established with regard to either of those two capital objects. (WN IV.v.b.40)28 Whatever institutional arrangements are made they must (in the sense of: cannot avoid) account for the ‘prejudices’ of the people when dealing with important matters such as food and religion – if public order is to be maintained. This is why he gives a qualified endorsement of the act of 1772. It was ‘though not the best in itself . . . the best which, the

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interest, prejudices and temper of the times would admit of’ (WN IV.v.b.53; Hont and Ignatieff 1983: 20). Moreover, Smith thinks that the laws of England, which at one point prevented middlemen from dealing in corn, encouraged the people’s prejudices in the wrong way (WN V.v.b.21–6). Hence, one reason to instruct the political elite in true political economy is to encourage them to design laws that, while still placating the prejudices of the members of the polity, prevent an encouragement of these prejudices. (See also Fleischacker 1999: 176–7.) This is, in fact, in accord with Smith’s own precept that he added to the last edition of TMS:

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The man whose public spirit is prompted altogether by humanity and benevolence, will respect the established powers and privileges even of individuals, and still more those of the great orders and societies, into which the state is divided. Though he should consider some of them as in some measure abusive, he will content himself with moderating, what he often cannot annihilate without great violence. When he cannot conquer the rooted prejudices of the people by reason and persuasion, he will not attempt to subdue them by force; but will religiously observe what, by Cicero, is justly called the divine maxim of Plato, never to use violence to his country no more than to his parents. He will accommodate, as well as he can, his public arrangements to the confirmed habits and prejudices of the people; and will remedy as well as he can, the inconveniencies which may flow from the want of those regulations which the people are averse to submit to. When he cannot establish the right, he will not disdain to ameliorate the wrong; but like Solon, when he cannot establish the best system of laws, he will endeavour to establish the best that the people can bear. (TMS VI.ii.2.16; emphasis added) So, the content of the original property is not established by history; at most Smith’s moral psychology and historical account can reinforce it. History teaches that the content of the derived property rights cannot be fixed. What will count as reasonable is a contingent affair. Moreover, history teaches that political prudence demands that legal institutions should accommodate local prejudices without encouraging them. Insisting on absolute rights, even if reasonable, could cause political disasters. In this section, I have argued that Smith’s turn to history exhibits the contingent nature of the content of our derived property rights (and social institutions in general). History teaches that the ‘reasonable’ content of such rights tend to fit the past, local needs of a particular society, given the prejudices of the population. So property arrangements are a solution to a past problem, but history cannot teach us what our future needs are. This is why the scope and nature of our right to derived property may change. It explains why derived property rights are never absolute.

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IV.B History as baseline29 One important reason to turn to history is that it can provide a useful baseline or measure in evaluating legal arrangements. The previous section already contains some evidence for this. What will count as ‘reasonable’ will be a contingent affair, determined by the contingent, social organization and needs of a society. Second, history teaches that in our evaluation one must allow for suboptimal arrangements that meet standards of local prudence and do not offend local prejudices. Third, the messy historical details are a kind of antidote against philosophers’ tendency to offer ‘partial and imperfect’ accounts of nature (TMS VI.i.1.1). Philosophers tend to avoid messy details of the real world. (See Fleischacker 2004: 270–1.) For the Smithian philosopher, the Hobbesian state of nature sets the baseline too low, while the Rousseauian state of nature sets the baseline too high. In Smith’s hunting stage (as close he gets to the state of nature), there is only ‘tolerable security’. From this point of view, feudalism is a definitely undesirable. But some herding, agricultural and most commercial societies will be definite advances over the state of nature in many respects, especially in terms of, say, material comfort (even of the poorest members of society) and military might. (See his famous comparison between the standard of living of an ‘industrious and frugal peasant’ and an African king, who is the ‘absolute master’ of ‘ten thousand naked savages’, WN I.i.) Using history as a baseline has important implications in interpreting even very famous passages in Smith. For example, in TMS the invisible hand is, through the gratification of the ‘vain and insatiable desires’ by the rich, said ‘to make nearly the same distribution of the necessaries of life’ (TMS IV.i.10). In Smith, the necessaries of life are contrasted with the conveniences of life, which is what the rich are said to aim at. Now often people see in this passage Smith’s commitment to benign stoic providentialism. But regardless of what else Smith is saying, he is making a fairly weak claim here; the invisible hand is equalizing only to some degree the bare necessities of life. Moreover, the claim is even weaker than first impressions suggest. For, we are also told something about how he interprets the quantity of the ‘necessaries of life’ here. For Smith qualifies the distribution of the necessaries of life with the claim: ‘which would have been made, had the earth been divided into equal portions among all its inhabitants’. This is a counterfactual. The question is what hypothetical time (and, thus, population size) does Smith have in mind when he discusses equal portions of the earth: at creation, the establishment of property relations, the present, or, say, any given time? Regardless how one answers this question, by Smith’s own lights simply dividing the earth – he does not even say the fruits of the earth – in the absence of exchange relations, the division of labour, or derived property rights, is going to produce rather small quantities of anything. So, when the baseline is the

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Hobbesian state of nature or conditions of starvation, the invisible hand is advancing the interest of society when the rich select the most agreeable parts. In miserable times, such as feudalism or aristocracy, and the context suggests this is what Smith has in mind (note the references to the ‘proud and unfeeling landlord’, who ‘views his extensive fields’, seems to live in a ‘palace’, and employs ‘thousands’) even the poor get more than they would otherwise have. (Of course, the political claim is important in the context of Hume’s and Smith’s attack on feudalism and their interpretation of how feudalism was undone by the feudal lords’ insatiable interest in luxury goods.) But if the baseline is a society with advanced division of labour, then the claim that Smith makes on behalf of the invisible hand as presented in TMS, however interpreted, is quite implausible.30 So, even if Smith is presupposing providentialism here, he is making an extraordinary weak claim: even during the worst political times, the consumption of the rich will help the poor do better than in a Hobbesian state of nature. This suggests a final sense in which history offers a valuable baseline. In WN, Smith tends to compare the situation of a society across whole centuries. This historical sense allows one to ignore short-term fluctuations when one evaluates institutions of society. Moreover, it also offers the proper perspective when one advocates or evaluates policy/legal changes; one may ask, given one’s historical experience and one’s theoretical understanding provided by a Humean ‘science of man’, are, say, proposed legal changes going to ‘ameliorate’ or worsen the conditions of the working poor in the long term? Of course, this historical perspective should not be abused to ignore genuine, short-term or inhumane conditions. As we have seen, Smith, following Hume, is clear that in case of, for example, famine property rights may be revoked. (See Fleischacker’s 2004: 210, discussion of WN IV.v.b.39–40.) So, using history as a baseline is an antidote against philosophers’ tendency to examine and evaluate institutional arrangements from ideal points of view.31 History has a moderating effect. When we propose changes or innovations we should evaluate them in light of historical experiences. IV.C The Enlightenment Imperative Of course, the treatment of property is not the only place in Smith’s oeuvre where he offers a historical account. One can point to many other places.32 But he does not offer much explanation for his historical turn. (This is no surprise given his general restraint in discussing methodological issues.) For example, Smith’s relatively neglected treatment of the origin of language (cf. Otteson 2002, Levy 1997, and esp. Berry 1974) is said to be directed narrowly at correcting the ‘ingenious and eloquent Mr. Rousseau’ and to draw the conclusion ‘that language becomes more simple in its rudiments and principles, just in proportion as it grows more complex

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in its composition’ (Smith 1983, Considerations Concerning the First Formation of Languages, paras 2, 41). More helpful is Smith’s already quoted remark when he introduces his celebrated history of the ‘different theories which have been given concerning the nature and origin of our moral sentiments’ in Part VII of TMS. This history illustrates that all of Smith’s predecessors have a ‘partial and imperfect view of nature!’ So, a benefit of the study of comparative history is to correct one-sidedness (recall ‘Letter to the Edinburgh Review’, para. 12). Even more helpful are Smith’s statements in the posthumously published ‘The History of Astronomy’, which is supposed to instruct the reader in the unexpectedly large role of the sentiments wonder, admiration, and surprise in intellectual pursuits (Smith 1980 EPS, ‘Astronomy’, Intro. 6). In a narrow sense this is the point of Smith’s essay, which is reflected in its full title: ‘The Principles which lead and direct Philosophical Enquiries: Illustrated by the History of Astronomy’. Yet, while Black and Hutton, Smith’s original editors, promise the readers ‘satisfaction and pleasure’ (‘Advertisement by the Editors’), Smith claims that the history of philosophy (construed widely) that he provides offers ‘the most entertaining and instructive’ account (‘Astronomy’, II.12). This suggests the piece is not merely offered for satisfaction and pleasure. Black and Hutton call attention to Smith’s intention to write ‘a connected history of the liberal sciences and elegant arts’. So, one may ask why this would provide the most instructive material? Elsewhere (Schliesser 2005b), I argue that the ‘Astronomy’ defends a subtle, naturalistic picture in which the potential, open-ended nature of physical inquiry, with changing norms of theory acceptance, is reconciled with a realist stance toward the claims made by the best available theory (that is, Newton’s). So, a turn to history can correct one-sidedness and make the inquirer aware that future impartial spectators may improve on one’s explanations and evaluative criteria. So far, I have treated Smith’s turn to history in relative isolation. As is well known, interest in actual and what became known as ‘theoretical or conjectural’ history – that is, to show, in the words of Dugald Stewart, how in the absence of reliable ‘information’ an event ‘may have been produced by natural causes’ (‘Account of the Life and Writings of Adam Smith’, II.45, 47, in Smith 1980; emphasis in original) – is widespread among Smith’s Scottish and French contemporaries.33 According to Stewart, one important motivation for offering a conjectural history is to put a ‘check’ to ‘that indolent philosophy, which refers to a miracle, whatever appearances, both in the natural and moral worlds, it is unable to explain’ (‘Account’, II.47; emphasis added). Thus, according to Stewart, conjectural history is part of a more fundamental Enlightenment project in which explanations are demystified and secularized. This is an important clue. In his Lectures on Rhetoric and Belles Lettres, in the context of praising Machiavelli, Smith remarks: the ‘chief purpose of History [is] to relate Events and connect them with their causes without

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becoming a party on either side’ (Smith 1983, Lecture XX, Wednesday 12 January). This use of history fits quite naturally with Smith’s (cautious) Enlightenment project on behalf of the public (for example, WN I.x.c.40; Schliesser 2003, 2006). He believes that the ‘study of science and philosophy’ can have a social utility in suppressing religious ‘enthusiasm and superstition’; this is why he advocates mandatory exams in them for anybody who wants to practice a profession (WN V.i.g.14; V.i.f.50–6). Smith thinks that an educated populace is necessary to maintain freedom, public accountability and public order in a modern society. Smith worries about ‘gross ignorance and stupidity’ in the modern world (WN V.i.f.61). He worries that men become incapable of ‘bearing a part in any rational conversation’ and of ‘forming any just judgment concerning many even of the ordinary duties of private life’ (WN V.i.f). Thus, history teaches one to appreciate impartial, causal explanation while making one familiar with idea of possible, future revision. The fact that we find this idea in the lectures, suggests that my rational reconstruction connects with Smith’s views. Now one may think34 that my account of Smith suggests that history shows that all previous understandings (of property, moral theories, astronomy) that claimed to be objective were in fact limited or partial; that history teaches us that our convictions about what is sacred or established fact will seem less secure to future generations. It is tempting to think Smith agrees with Hume’s barely disguised glee that much law has its origin in arbitrary decisions without precedent (second Enquiry, Appendix III.10). This account of Smith would put his genealogical project in the unmasking tradition familiar from the writings of Nietzsche and Foucault. (Hume’s account of religion in Natural History of Religion is also deflationary.) But we have already seen that Smith is more than willing to ‘accommodate, as well as he can’, the ‘confirmed habits and prejudices of the people’ rather than to undermine the public’s beliefs. So, even leaving aside his commitment to public enlightenment, it is unlikely that Smith intends the main point of his turn to history to be deflationary in a general sense. Moreover, I have argued elsewhere that Smith’s epistemology acknowledges fallibilism, but not general scepticism about the beliefs we hold true. Only if one were willing to attribute to Smith an esoteric doctrine is my reading of Smith unpromising. Now, I do not reject categorically attempts to read between Smith’s lines. But because Smith’s claims about original property rights cohere with the moral psychology of TMS, the historical account of the origin of property rights in Book V of WN, and the general egalitarian drift of his political economy, I see no reason to doubt his sincerity when he talks of the ‘most sacred and inviolable’ nature of the original property right we have in the work with our hands. But Smith’s account does make clear that our evaluation of institutions that maintain derived property rights could be very different if we lived in different circumstances. But that does not undermine our commitment to these rights in present circumstances.

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IV.D The moral role of articulation In sections IVA-IVC, I have collected some reasons to explain why Smith would turn to history. But even as a group these do not answer the challenge that motivates this paper: these reasons do not appear to impact the normative force of the original property right. At most they help us better understand the contingent nature of the content, limitations, and aims of our derived property rights. This is no small thing, but it does not get to the nub of the matter. In this section, I use many elements of the argument so far to propose a speculative reading of Smith’s strategy. Dugald Stewart claims that ‘conjectural’ history aims to show how in the absence of reliable information an event ‘may have been’ produced by natural causes (‘Account’, II.47–8). While I agree with Stewart, this formulation underestimates the project in Hume and Smith. They also articulate constraints on the development of social institutions. For example, according to Hume, ‘rude and savage men’ are not capable of dreaming up the ‘idea of justice’ in the state of nature (Treatise 3.2.2.7). Justice is, then, for Hume a distinct intellectual achievement. Hume admits that even ‘savage and uncultivated’ people can be made sensible of the interest in keeping promises (Treatise 3.2.5.11; emphasis added), but he claims, anticipating Nietzsche, that a ‘promise . . . is naturally [Hume means here in the state of nature] something altogether unintelligible’ (Treatise 3.2.5.4). For Hume, the system of justice is a human artifice and distinct intellectual achievement, so reflection on it allows us to be pleased by our joint achievement; we have moved beyond the savage and uncultivated stage. This is why I said Korsgaard understates why Hume’s account attains what she calls ‘reflective endorsement’. Moreover, for Hume, ‘promises have no force, antecedent to human conventions’ (Treatise 3.2.5.7). The condition of justice, which creates some stable property relations, and thus, an interest in keeping promises, is – to use a Kantian sounding phrase – a condition of the possibility for the giving of promises (Treatise 3.2.5.8–10). That is, for Hume promises only first arise, and then necessarily (3.2.6.1), when there is an interest in keeping them. Smith’s account of the origin of justice echoes the conceptual structure of Hume’s argument. For Smith, law only arises when there is an ‘interest’ in it. Smith thinks an ‘advantage’ in harming others can arise only when there is more extensive and unequal property distribution. This cannot occur in a hunting society, and comes about only after a major change; shepherding must become a predominant form of social organization (WN V.i.b.12; this is quite compatible with people injuring each other for various reasons in hunting societies). So, for Smith, against Hobbes and Hume, the unequal distribution of derived property is a social condition of possibility for the existence of regularly administered civil law (cf. Fleischacker 2004: 180–93). Smith’s conjectural history aims, in part, at exhibiting such necessary conceptual and causal relationships. This goes some way to

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explaining why even if Smith recognizes the normative force of the original property right he would offer a historical account alongside it. Smith is not merely after explaining how our conventions may have come into being without miracles, he is also articulating what elements are constitutive in it.35 Recall that even in WN it is important for Smith that people can partake in rational conversation. Elsewhere, I argue that despite emphasizing the importance of our sentiments, Smith insists natural philosophy is a social practice in which one uses reasons to appeal to each other’s (imagined) approval (Smith 1980, ‘Of the External Senses’, 12, 18; ‘Astronomy’, IV.15. TMS III.2.20–2. Schliesser 2005b). This is an important principle of Smith’s philosophy more generally. For Smith’s moral psychology turns on the idea that people are naturally social animals; from a very early age they are judged by others, and once they become aware of this they, in turn, judge the people in their environment and themselves (TMS III.1.2–6). This is made possible by the process of sympathy – the mechanism of the imagination by which we have fellow-feeling with the passions of others (TMS I.i.1.5, 10, III.1.2; Griswold 1999, ch. 2; Otteson 2002, chs 2–3; Darwall 1998: 264–9; Levy and Peart 2004). Smith claims that we behave in ways for which we expect to be applauded or approved of by others (TMS III.1.5). As we grow up, we internalize the values and expectations of our community, or public opinion. We learn to behave as though we are watched and judged by an impartial spectator (TMS III.3.3). While emphasizing the importance of imagination, Smith writes ‘We must, here, as in all other cases, view ourselves not so much according to that light in which we may naturally appear to ourselves, as according to that in which we naturally appear to others’ (TMS II.ii.2.1). This imagined ‘awful and respectable judge’ within, can help us correct the standards of our community when we desire to be praise-worthy (TMS III.2.24–30). This desire, based on our desire for mutual sympathy and the love of virtue, is the crucial step in Smith’s theory. The source of this desire – that the approval we receive is deserved – Smith locates in the fundamental uncertainty that each of us has about our own judgments (TMS III.2.24, 28; ‘Astronomy’, II.4, 40). Smith’s emphasis on the appeal to reasons is no accident. Smith treats the moral deliberation of our impartial spectator when, say, we attempt to act with self-command and propriety, as discursive. This is why he often represents it as a ‘voice’ of ‘reason’ (TMS III.3.4).36 Maria Carrasco notes perceptively that Smith distinguishes between our ‘natural feelings’ and our cultivated discipline over these. She argues that TMS can, thus, be interpreted, despite the language of sentiments and the opposition to rationalism in ethics, as a system of practical reason (Carrasco 2004: 84–9).37 My suggestion about Smith’s turn to history is, thus, as follows. It represents Smith’s recognition that in an Age of Enlightenment, when Newtonian natural philosophy has become capable of offering real, albeit

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revisable, causal explanations (Schliesser 2005b),38 there has been a fundamental change in what is demanded of an explanation, including moral ones. Once the experimental method has been introduced into moral and political affairs, one cannot turn the clock back to a more rationalistic or revelatory approach. When we adopt an inquisitive stance, we demand an impartial, causal account of why certain norms are possible for beings like us before we accept that they are binding on us.39 We do so even at the risk that the genealogy changes our self-conception. The existence of this risk, for Smith, is why even after offering a proposal that could allow one to attribute the ‘reflective endorsement’ to Smith near the end of section III, I am hesitant to attribute it to Smith. Reflective endorsement, which follows (recall) ‘if practical philosophers can get people to accept the claims of morality simply by telling them the truth about the nature of morality’, presupposes a stable human nature, so that we can recognize the truth as being about (beings sufficiently close to) us. This assumption is bedrock in Hume. In Hume the relative stability of human nature is taken for granted, so much so that he uses it as a constraint on interpreting history (Berry 1982). Thus, for Hume, history can never really surprise. While I believe that Smith had a more evolutionary conception of human nature,40 here I can rely on the fact that in the ‘Introduction’ of the ‘History of Astronomy’, Smith claims: It is the design of this Essay to consider particularly the nature and causes of each of these sentiments [wonder, admiration, and surprise], whose influence is of far wider extent than we should be apt upon a careless view to imagine. For Smith, history can teach us surprising things about ourselves. But I digress. My main proposal is this: for Smith, accounts of the naturalistic development of social institutions of property and their articulation in our practices and theorizing, are partially constitutive of the normative force of these institutions. Of course, this account is not the sole authority of the normative force of these institutions. Smith himself emphasizes that for most of us, most of the time this force is derived from long-standing moral rules, whose authority, in turn, may be seen to be derived from other (divine) authorities (TMS III: 4–5). But in a world of Enlightenment, any appeal to authority, whether reason or revelation, is always open to further investigation. We may turn to history to learn how our social institutions fit our (past) needs; this provides a normative baseline with which to evaluate changes in our social institutions. In doing so, the historical account does justice to our Enlightenment Imperative, one that demands non-miraculous, causal explanations for our practices. These explanations teach us something about the social conditions of possibility of our institutions. The historical account enables a moral theory in which explanation

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and justification are mutually reinforcing for beings self-conscious of their status as intellectual animals. That is to say, while Hume thought that after the ‘true philosopher’ had defeated various kinds of ‘superstition and enthusiasm’, one could return to and defend a kind of ‘common sense’, Smith saw that reflection can make common sense, including our moral self-understanding, itself a moving target (Schliesser 2006; cf. Fleischacker 2004, ch. 4). We must live with this uncertainty.

Acknowledgments This paper originates as a response to a serious question by Ray Frey on a paper, co-written with Spencer Pack, that I presented at Central APA, 2003. I have received helpful criticism on earlier drafts of this paper from Christopher Berry, Lauren Brubaker, Steve Darwall, Sam Fleischacker, Jeremy Bendik-Keymer, Elias Khalil, Larry May, Leon Montes, Spencer Pack, Abe Stone, and anonymous referees for this Review. The usual caveats apply.

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1 This is consistent with Smith’s account in ‘The History of Astronomy’ (in Smith 1980). While my paper focuses on the ethical issues, it follows from my argument that, for Smith, the ‘scientific’ theories or ‘machines’ are artefacts that may be guided by evolving values, and this, too, seems consistent with the ‘Astronomy’ (Schliesser 2005b). 2 The argument of this section summarizes with minor changes, Pack and Schliesser (2006). 3 Haakonssen (1981: 106) correctly points out that Smith does not use the word ‘rights’ here. Cf. Fleischacker (2004: 153). 4 Oddly, Haakonssen ignores this passage where Smith does talk of ‘rights’. 5 At WN IV.ix.7–8, Smith makes the point that if a higher power demands income in the form of rent (exacted by the landlord) or taxes on that rent (levied by the king or the church) that would prevent the continuation of farming-operations then this action will merely be self-defeating in the long run. In order to avoid this bad outcome some part of farming income ought to be regarded as ‘sacred and inviolable’. Note that this is not a claim about the sacred nature of property rights, but merely sound advice to various powers to prevent abusive and self-destructive policies. 6 I am avoiding Smith’s gendered language. But Smith’s argument does not require it here. 7 Jeremy Bendik-Keymer called my attention to lack of inclusion of disabled. 8 See Stewart (1963). Meek (1976: 30–1) criticizes this, although helpfully calls attention to Hume’s Treatise 3.2.8. 9 There are, of course, other crucial differences between Smith and Hume. For example, on how the difference between Smith and Hume on sympathy connects to wider disagreement, see Darwall (1998: esp. 264–9) and Levy and Peart (2004). 10 Smith thinks that various forms of tranquility of mind can be available to prudent men (TMS VI.i.11–13), and, especially, mathematicians and (natural) philosophers (III.2.20). Of course, not everybody in society can achieve tranquility; in

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TMS, Smith talks of the ‘vain splendour of successful ambition’ (VI.i.13) that cause men to elude tranquility, while in WN ‘the mean rapacity . . . of merchants and manufacturers’ is singled out for such failure (WN IV.iii.c.9). 11 It is a bit strange to see Smith denying that there is any benefit at all from harms to reputation of others. After all, it does provide a situational benefit, although not a material benefit – which is perhaps what Smith had in mind. On the frequent distinction between the passions and the interests, see Hirschman (1977). Elsewhere, Smith is explicit about our need for status; ‘to be observed, to be attended to, to be taken notice of with sympathy, complacency, and approbation’ (TMS I.iii.2.1; the whole of I.iii.2 is relevant). See also Reisman (1976, ch. 4). It is also odd that Smith ignores sexual sources of conflict. 12 Cf. the last few lines of Hume’s ‘Of Commerce’: the fewer goods or possessions people enjoy, the fewer quarrels are likely to arise amongst them, and the less necessary will there be for a settled police or regular authority to protect and defend them from foreign enemies, or from each other. (Hume 1985: 267) 13 The editors of WN usefully refer to WN V.iii.89 and TMS VI.ii.1.20. 14 Somewhat surprisingly, Smith calls Hume’s position, without mentioning Hume by name, ‘superficial’ (TMS II.ii.3.5). David Raynor (private communication) has suggested that Hume is not here the specific target of Smith’s criticism, but Grotius and Pufendorf. (The editors of TMS consider and reject this possibility.) Here I cannot do justice to Raynor’s detailed and subtle argument. Smith’s criticism, whether directed specifically to Hume or not, is applicable to all ‘rationalistic’ accounts of the origins of justice. 15 What follows has been inspired by Haakonssen (1981: 83–7), Samuel Fleischacker (2004) and Steve Darwall’s presentation at the Eastern APA 2002 (in response to Rothschild 2001), published as Darwall (2004). 16 Cf. Nietzsche’s Of Genealogy of Morals. From Nietzsche’s point of view, Smith’s account is accurate as a representation of the development of a ‘slave’ morality. Cf. Strawson (1977). 17 Of course, this interpretation is speculative because Smith may have thought one could nurture something artificial in the breast. I will try to make my reading more plausible below. See, also, Pack (1997: 128–30). 18 In his intended book on justice, Smith would no doubt have shown in more detail exactly how the passion resentment works in human history to ultimately help develop the social institution of justice, thus enabling increasingly complex societies to develop. As Smith writes at the very end of TMS: I shall, in another discourse, endeavour to give an account of the general principles of law and government, and of the different revolutions they have undergone in the different ages and periods of society, not only in what concerns justice, but in what concerns police, revenue, and arms, and whatever else is the object of law. (TMS VII.iv.37. See also paragraph 2 of the ‘Advertisement’ to the sixth edition of TMS.) Smith never published that work. Nonetheless, it is clear from the student lecture notes of his course in jurisprudence that this account would have been intimately bound up with his four stage theory of socioeconomic development and his theory of the impartial spectator. Knud Haakonssen has attempted – through a valiant reconstruction by relying on lecture notes of Smith’s students – to

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show that Smith presupposes his theory of the impartial spectator to account for original property. (See also Young (2006) for an analysis of the continuing merits of Smith’s approach.) Charles Griswold and Sam Fleischacker have offered penetrating reasons for suggesting that, if the reconstruction is Smith’s position, it suffers from near-fatal objections and, thus, Smith was wise never to put it in print. My account in the body of the text suggests that for the purposes of WN and TMS, Smith does not need a fully fleshed out theory, and so Fleischacker’s and Griswold’s objections do not bear on Smith’s published position. For discussion, and further references, see Fleischacker (2004: 147ff.). 19 Korsgaard here quotes from Treatise 3.3.6.3:

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But this sense [of morals] must certainly acquire new force, when, reflecting on itself, it approves of those principles, from whence it is deriv’d, and finds nothing but what is great and good in its rise and origin . . . not only virtue must be approv’d of, but also the sense of virtue: And not only that sense, but also principles from when it is deriv’d. So that nothing is presented on nay side, but what is laudable and good.

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20 Of course, this is not what Hume said about Smith’s TMS. See Hume’s entertaining letter to Adam Smith, 12 April 1759, and another 28 July 1759 (Smith 1987 Corr. Letters 31, 36). Moreover, in the former letter, Hume reports the public was very pleased by Smith’s account. 21 For a more recent defence of this interpretation, see Cropsey (1957). On the complex rhetorical structure of TMS, see Brown (1994), Griswold (1999), and Fleischacker (2004, ch. 1). 22 I address this in work in progress, ‘Shelley’s Frankenstein, sympathy, and the debate between Hume and Smith’. 23 Abe Stone reminds me that a Hobbesian might think it an unfortunate tendency to get dragged into other people’s fights. 24 For insightful remarks cf. Berry (1989: 114ff.) although the importance of consumption is neglected by Berry. 25 In The Theory of the Leisure Class, Thorstein Veblen captures this point when he points out that institutions are always adapted to yesterday’s problems. 26 Here the editors of WN cite Hume’s essay ‘Of Commerce’. In the History of England, vol. 2, Hume also stresses the importance of the rediscovery of Justinian’s law-code and the self-interest of the clergy to promote the rule of (Roman) law. The clergy were teachers of Latin and law, and owned great tracts of land. 27 Smith is clearly following Hume here. See Hayek (1967: 113), Rothschild (2001: 10), Rosenberg (1975: 384ff.). 28 Forbes (1975: 183) thinks this passage is evidence of Smith’s ‘distrust of the people’s judgment, or anti-democratic sentiment’ in WN, but this is not obvious. Whether or not Smith was a democrat is irrelevant to this passage (see for modest pro-democratic sentiment WN III.ii.14). There is no doubt that Smith thought people were often faulty judges of their own interests, nevertheless he thought they were better judges than the Ruler: ‘[T]he law ought always to trust people with the care of their own interest, as in their local situations they must generally be able to judge better of it than the legislator can do’ (WN IV.v.b. 16; for similar comments: V.ii.c.18). 29 The basic idea of this part was generated at the Central APA, 2004, in conversation with Sam Fleischacker in light of his response to papers by Jerry Muller, David Raynor, and Fred Neuhouser at a special APA session devoted to his 2004 book. See this Review, 2006, pp. 225–58.

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30 When the ‘invisible hand’ gets invoked in Book IV of WN it is in the context of a society with advanced division of labour, but this is not touched by my discussion here. Analysis of it is beyond the scope of this paper. 31 Cf. Hume’s appeal to experience of history against the social contract theorists’ claim that the foundation of all governments is a (continuing) social contract in ‘Of the Original Contract’. 32 For example, in Schliesser (2005a) I offer an interpretation of the point of the historical account of Book III in WN and the ‘Digression concerning the Variations in the Value of Silver during the Course of the Four last Centuries’ at the end of Book I. 33 See Dugald Stewart’s comments (‘Account’, I.48, II.51). For modern commentary see Berry (1997). Stewart emphasizes that Smith appears to have supplied conjectural histories to many ‘trifling articles’ and ‘common topics of discourse’ on a very regular basis in conversation (II.54). 34 The next two paragraphs respond to objections by an insightful, anonymous referee. 35 Elsewhere, Smith is recorded to have claimed that the capacity to speak a language is necessary to have the ability to trade (Smith 1978, LJB 211); Fleischacker (2004: 90–4) nicely connects this with the famous passage about beggars, butchers, and bakers at WN I.ii.2 to show, while citing WN III.ii and V.i.g.19, the moral importance to Smith of rational persuasion. 36 Building on Fleischacker (1999) Montes has linked the importance of sympathy, propriety, and self-command in Smith with a proto-Kantian view about moral autonomy (2004, chs 2–4). 37 I part ways with Carrasco, however, when she claims (2004: 87, n. 27) that these natural feelings may be ‘nonmoral or premoral sentiments’; my treatment of ‘natural’ resentment above suggests that some natural feelings may be a ‘moral’ sentiment. 38 Smith treats pre-Copernican astronomy instrumentally, while Newton’s astronomy and physics are described in realist terms. 39 Steve Darwall has reminded me that we will also need a showing that these are norms that it would make sense for us to accept for our actual circumstances (including our understanding of them) from a framework of equal respect that is already implicit in Smith’s account of judgments of justice in the first instance. See Darwall (2004) for discussion. 40 For Smith, the division of labour is the: necessary, though very slow and gradual consequence of a certain propensity in human nature . . . the propensity to truck, barter, and exchange one thing for another. Whether this propensity be one of those original principles in human nature, of which no further account can be given; or, whether, as seems more probable, it be the necessary consequence of the faculties of reason and speech, it belongs not to our present subject to enquire (WN I.ii.1–2) This passage, first, implies that Smith thought it likely that one can at least imagine human nature (at one point in the perhaps mythical past even prior to the division of labour) without this propensity; the more ‘probable’ view is, in fact, one in which some now stable propensities of human nature require the previous development of some faculties. This is entirely compatible with the picture that Smith presents in his (published) essay ‘Considerations Concerning the First Formation of Languages’ (eventually appended by Smith to the third edition of TMS; republished in Smith 1983) where the capacity for abstraction/ reason and language, themselves, are slow cultural/societal achievements and

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not fixed givens of human nature. Moreover, at the start of WN, Smith is deliberately bracketing questions about the fixed or unfixed nature of human nature. For the purposes of the inquiry at hand, Smith thinks he can take some elements/ propensities of human nature as given. But this does not mean that he believes them to be unchanging.

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Berry, C.J. (1974) ‘Adam Smith’s Considerations on Language’, Journal of the History of Ideas, 34: 130–8. –––– (1982) Hume, Hegel, and Human Nature, The Hague: Martinus Nijhoff. –––– (1989) ‘Adam Smith: commerce, liberty and modernity’, in Philosophers of the Enlightenment, P. Gilmour (ed.), Edinburgh: Edinburgh University Press. –––– (1992) ‘Adam Smith and the virtues of commerce’, in Virtue, J. Chapman and W. Galston (eds.), New York: New York University Press. –––– (1997) The Social Theory of the Scottish Enlightenment, Edinburgh: Edinburgh University Press. Brown, V. (1994) Adam Smith’s Discourse: Canonicity, Commerce, Conscience, London: Routledge. Campbell, T.D. (1971) Adam Smith’s Science of Morals. London: Allen & Unwin. Carrasco, M.A. (2004) ‘Adam Smith’s reconstruction of practical reason’, The Review of Metaphysics, 58: 81–116. Cropsey, J. (1957) Polity and Economy: An Interpretation of the Principles of Adam Smith, The Hague: Martinus Nijhoff. Darwall, S. (1998) ‘Empathy, sympathy, care’, Philosophical Studies, 89: 261–82. –––– (1999) ‘Sympathetic liberalism: recent work on Adam Smith’, Philosophy & Public Affairs, 28: 139–64. –––– (2004) ‘Equal dignity in Adam Smith’, The Adam Smith Review, 1: 129–34, V. Brown (ed.), London and New York: Routledge. Fleischacker, S. (1999) A Third Concept of Liberty: Judgment and Freedom in Kant and Adam Smith, Princeton: Princeton University Press. –––– (2002) ‘Adam Smith’ in A Companion to Early Modern Philosophy (Blackwell Companions to Philosophy), S.M. Nadler (ed.), Oxford: Blackwell Publishers. –––– (2004) On Adam Smith’s ‘Wealth of Nations’: A Philosophical Companion, Princeton: Princeton University Press. Forbes, D. (1975) ‘Sceptical whiggism, commerce, and liberty’, in Essays on Adam Smith, A.S. Skinner and T. Wilson (eds), Oxford: Oxford University Press. Griswold, C.L. (1999) Adam Smith and the Virtues of Enlightenment, Cambridge: Cambridge University Press. Haakonssen, K. (1981) The Science of a Legislator: The Natural Jurisprudence of David Hume and Adam Smith, Cambridge: Cambridge University Press. Hayek, F.A. von (1967) ‘The legal and political philosophy of David Hume’, in Studies in Philosophy, Politics, and Economics, London: Routledge. Hirschman, A. (1977) The Passions and the Interests: Political Arguments for Capitalism before Its Triumph, Princeton: Princeton University Press. Hont, I. and Ignatieff, M. (1983) ‘Needs and justice in the Wealth of Nations: an introductory essay’, in Wealth and Virtue: The Shaping of Political Economy in the Scottish Enlightenment, I. Hont and M. Ignatieff (eds), Cambridge: Cambridge University Press.

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Hume, D. (1983) The History of England from the Invasion of Julius Caesar to the Revolution in 1688, Foreword by W.B. Todd, 6 vols, Indianapolis: Liberty Fund. –––– (1985), Essays, Moral, Political, and Literary, E.W. Miller, (ed.) rev. edn, Indianapolis: Liberty Fund. –––– (1998) An Enquiry Concerning the Principles of Morals, T.L. Beauchamp (ed.) Oxford: Oxford University Press. –––– (2000) A Treatise of Human Nature, D.F. Norton and M.J. Norton (eds), Oxford: Oxford University Press. –––– (2001) An Enquiry Concerning Human Understanding, T.L. Beauchamp (ed.) Oxford: Oxford University Press. Khalil, E. (1998) ‘Is justice the primary feature of the state? Adam Smith’s critique of social contract theory’, European Journal of Law and Economics, 6: 215–30. Korsgaard, C.M. (1996) The Sources of Normativity, Cambridge: Cambridge University Press. Levy, D.M. (1997) ‘Adam Smith’s rational choice linguistics’, Economic Inquiry, 35: 672–8. Levy, D.M. and Peart, S.J. (2004) ‘Sympathy and approbation in Hume and Smith: a solution to the other rational species problem’, Economics and Philosophy, 20: 331–49. Meek, R.L. (1976) Social Science and the Ignoble Savage, Cambridge: Cambridge University Press. –––– (1977) Smith, Marx and After: Ten Essays in the Development of Economic Thought, London: Chapman and Hall. Montes, L. (2004) Adam Smith in Context: A Critical Reassessment of Some Central Components of His Thought, London: Palgrave Macmillan. Otteson, J.R. (2002) Adam Smith’s Marketplace of Life, Cambridge: Cambridge University Press. Pack, S.J. (1997) ‘Adam Smith on the virtues: a partial resolution of the Adam Smith problem’, Journal of the History of Economic Thought, 19: 127–40. Pack, S.J. and Schliesser, E. (2006) ‘Smith’s “Humean” criticism of Hume’s account of the origin of justice’, Journal of the History of Philosophy, 44: 47–63. Raynor, D. (1984) ‘Hume’s Abstract of Adam Smith’s The Theory of Moral Sentiments’, Journal of the History of Philosophy, 22: 51–79. Reisman, D.A. (1976) Adam Smith’s Sociological Economics, London: Croom Helm. Rosenberg, N. (1975) ‘Adam Smith on profits – paradox lost and regained’, in The Market and the State: Essays in Honour of Adam Smith, A.S. Skinner and T. Wilson (eds), Oxford: Clarendon Press. Rothschild, E. (2001) Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment, Cambridge MA: Harvard University Press. Schliesser, E. (2003a) ‘Review of J.R. Otteson’s Adam Smith’s Marketplace of Life’, in Philosophy in Review, 23: 364–6. –––– (2003b) ‘The obituary of the vain philosopher: Adam Smith’s reflections on Hume’s Life’, Hume Studies, 29: 327–62. –––– (2005a) ‘Some principles of Adam Smith’s Newtonian methods in the Wealth of Nations’, Research in History of Economic Thought and Methodology, 23: 35–77. –––– (2005b) ‘Realism in the face of scientific revolutions: Adam Smith on Newton’s “proof ” of Copernicanism’, British Journal for the History of Philosophy, 13: 697–732.

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–––– (2006) ‘Adam Smith’s benevolent and self-interested conceptions of philosophy’, in New Voices on Adam Smith, L. Montes and E. Schliesser (eds), London: Routledge. Skinner, A.S. (1996) A System of Social Science: Papers Relating to Adam Smith, 2nd edn, Oxford: Clarendon Press. Smith, A. (1976a) The Theory of Moral Sentiments, D.D. Raphael and A.L. Macfie (eds), Oxford: Oxford University Press; reprinted, Liberty Press (1982). –––– (1976b) An Inquiry into the Nature and Causes of the Wealth of Nations, R.H. Campbell and A.S. Skinner (eds), Oxford: Clarendon Press; reprinted, Liberty Press (1981). –––– (1978) Lectures on Jurisprudence, R.L. Meek, D.D. Raphael and P.G. Stein (eds), Oxford: Clarendon Press. –––– (1980) Essays on Philosophical Subjects, W.P.D. Wightman (ed.), Oxford: Clarendon Press; reprinted Liberty Press (1982). –––– (1983) Lectures on Rhetoric and Belles Lettres, J.C. Bryce (ed.), Oxford: Clarendon Press. –––– (1987) Correspondence of Adam Smith, E.C. Mossner and I.S. Ross (eds), Oxford: Clarendon Press. Stewart, J.B. (1963) The Moral and Political Philosophy of David Hume, New York: Columbia University Press. Stewart-Robertson, J.C. and Norton, D.F. (1980) ‘Thomas Reid on Adam Smith’s theory of morals’, Journal of the History of Ideas, 41: 381–98. –––– (1984) ‘Thomas Reid on Adam Smith’s theory of morals’, Journal of the History of Ideas, 45: 309–21. Strawson, P.F. (1977) ‘Freedom and resentment’, in Freedom and Resentment, and Other Essays, London: Routledge. Trincado, E. (2004) ‘Equity, utility and transaction costs: on the origin of judicial power in Adam Smith’, Storia del Pensiero Económico, 1: 33–51. Young, J.T (2006) ‘Adam Smith and new institutional theories of property rights’, The Adam Smith Review, 2: 48–68, V. Brown (ed.), London and New York: Routledge.

Invidious sympathy in The Theory of Moral Sentiments Jean-Pierre Dupuy

I A French approach based on the triangularity of human desire I.A Mimetic desire and social autopoiesis Adam Smith is a universal genius and as such his legacy belongs to the whole world. Unfortunately, the diverse national traditions of commentary of his work have to a large extent remained opaque to one another. The dominance of the English-speaking world in the Smith scholarship is a fait accompli for reasons easy to understand. However, as is well known, it was German philosophy that raised the issue of the compatibility between The Theory of Moral Sentiments and Wealth of Nations under the name ‘Das Adam Smith Problem’. As for French social thought, it has always been very active in the discussion of Smith, but, especially as regards its more recent manifestations, it seems that very little of it has transpired in the English-speaking world if one is to judge from the almost complete lack of references made to it in the specialized literature.1 I should like to present here a novel interpretation of a key point of TMS that is the result of the work of the so-called French ‘Intersubjectivist’ School of economics.2 Two features characteristic of the French school by contrast with its Anglo-American counterparts should be mentioned at the outset, as they may explain the reason why French scholars have been more sensitive than others to some aspects of Smith’s highly complex argumentation. The first characteristic that defines the French school is its highly interdisciplinary concern to never separate social sciences from their historical, anthropological, and philosophical conditions of possibility. The French intersubjectivists have situated themselves in the tradition of social anthropology that was brought to a premature halt by decades of structuralism and post-structuralism, and most especially, the French sociological school launched by Emile Durkheim and Marcel Mauss. In particular, they have been deeply influenced by the work of one of the latest representatives of this tradition, René Girard (1965, 1979, 1986). The latter’s fundamental

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anthropology is marked by its insistence on the role of the imitative nature of human desire in the constitution of social phenomena. Seen in this light, it appears that the original sin of mainstream economics is its putting at the beginning the subject-object relationship, as if the object was always already fully constituted when the always already fully constituted subject approaches it. The relation between subject and object is seen as a straight line. To be fair, economics is not alone in this respect. Rousseau’s notion of amour de soi, the Hegelian-Marxist concept of need, the Freudian ‘object-related libido’, analytic philosophy of action, and many more, all partake of the same conception. The French intersubjectivists have challenged this conception. Human desire, they claim, is essentially triangular. It is always mediated, that is, imitated on someone else’s desire. We often call this third party the mediator. The triangular (or ‘mimetic’) structure of human desire is not an origin, and the vertices of the triangle – the subject, the mediator, and the object – are not pre-existing entities. It is only through their transactions that they mutually shape one another, giving the false impression that they were fully constituted from the start. The triangle is neither a reality nor a Gestalt. It is a structural model of intersubjectivity, and cannot purport to be a grounding of sort. That leads me to the second defining feature of the French school. The latter has been instrumental in developing and refining the theory of selforganizing systems as a way to bring closer social sciences, life sciences, and physical sciences at a structural level. In particular, it has welcomed the Chilean school of autopoiesis, especially one of its founders, the late Francisco Varela. Varela and I have elaborated a critique of ‘primordial thinking’, of which Elias Khalil wrote, reading it in light of John Dewey’s ‘transactional view’: Varela and Dupuy argue that the source of primordial thinking is the obsession with ‘origins’. . . . The most interesting idea of Varela/ Dupuy is that the emergent unit or totality is neither reducible to, nor separable from, the components. They view the organism as involved in self-production, what they call ‘autopoiesis’, in the sense that organisms construct their own organization. They maintain that the self-referential character of the organism is also found in the social order, monetary system, living entities, cognition, and language . . . Varela/Dupuy’s idea of emergent organization seems to avoid the quest for primordial entities along the self-actional or interactional approaches. (Khalil 2003: 7) Indeed, Francisco Varela and I concluded the introductory essay to our volume Understanding Origins with the following words:

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Jean-Pierre Dupuy We thus submit that order and its origin may be thought of . . . in a way that escapes both the temptation of ultimate grounding as exogenous references into an ultimate Reason or Truth, and the temptation of complete absence of any regularity and disconnection from any order at all. The key is in the discovery, for each case and in each domain but sharing in a common logic, of a morphogenetic process capable of self-grounding and self-distinction. An origin which is neither non-existent or elusive, nor ultimate ground or absolute reference. (Dupuy and Varela 1992: 23–4)

Bringing those two defining characteristics together, the French intersubjectivists have been able to show that the triangular model can generate the kind of morphogenetic processes that are capable of self-grounding and self-distinction. As far as human affairs are concerned, we went even so far as to surmise that the converse is true, namely that the triangular model is the only one that has this capability; in other words, a necessary condition to escape the subject-object dichotomy is to introduce a third party – the so-called mediator. On all this it clearly appeared to us that Smith’s social and moral philosophy was an extremely brilliant and profound precursor. The reading I am going to propose of a specific but crucial point in TMS is consistent with both the triangular model of human desire and the autopoietic conception of the social order. Naturally it could be objected that we are reading an eighteenth-century work through the lenses of theories that were born two centuries later. To this two responses can be put forward. First, in intellectual history as well as in factual history, the future bestows meaning on the past and new ideas or facts inevitably create or fashion their own precursors. As long as human history continues, Sartre once wrote, the meaning of the French Revolution will always be ‘in suspense’. The same can be said of the meaning of a work of the mind such as TMS. This is a basic fact of human affairs that it makes no sense to regret. Second, I submit that a good criterion for comparing the merits of various interpretations of a superior intellectual work is the extent to which they make sense of all the aspects, facets, and details of the work in question, even those that appear at first as especially obscure, incomprehensible, or even inconsistent, revealing how nicely they dovetail with one another and form a coherent whole. On this score it seems to me that the French intersubjectivist interpretation fares fairly well. To be sure, only a systematic confrontation with other interpretations could allow us to so conclude, especially with the more recent English-speaking scholarship.3 This is not a task that I am now in a position to carry out, as the priority seems to offer the English-speaking readership a preview of an interpretive tradition that they have had so far no access to.4

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I.A Adam Smith’s third party: the spectator In the case of Adam Smith’s theatrical rendering of social life, the role of the mediator is obviously played by the character Smith calls the ‘spectator’ – impartial, or not. As conceived by Smith, the human subject is radically incomplete. He is even a non-existent entity before his engagement in the world. He desperately needs his fellow men in order to be able to stake out his own identity. As for the object of his desire, it too remains undefined until some form of transaction takes place. What is wealth for the supposed founding father of economics? It is everything that is being desired by the third party! An outstanding statement, to be sure. At the very beginning of the eighteenth century, in his famous Fable of the Bees, Mandeville (1924 [1723]) provoked a scandal by enunciating the central paradox of economic liberalism: it is ‘private vices’ which produce ‘public benefits’. The traditional virtues of temperance and moderation merely create an impoverished society, one in which scarcity leads to disorder and impotence. On the contrary, the liberation of the human passions – envy, covetousness, appetite for luxury, pride, and above all the most selfish one, vanity, defined as the love and pursuit of praise – makes it possible to develop industry and commerce and, by generating affluence, to produce a happy, well-ordered, and stable society. A few decades later, Adam Smith, a moral philosopher by profession, published his great treatise The Theory of Moral Sentiments (1759). This book examines the major systems of moral philosophy and devotes a long chapter to Mandeville’s, condemning it as ‘licentious’ and ‘wholly pernicious’ in that it ‘take(s) away altogether the distinction between vice and virtue’ (VII.ii.4.6). In essence, Smith’s principal complaint against Mandeville is that the latter played on words. What he called private vices are in fact moral sentiments that remain perfectly virtuous when maintained at a reasonable degree and become vicious only outside certain bounds. Take what Mandeville called vanity: this for him is anything referring to the sentiments of other people (third parties!). Now, Smith says, the ‘love of virtue’ and the ‘love of true glory’, which are the two ‘noblest and best passion(s) in human nature’, also refer to other people’s sentiments – if not to what they are really, at least to what they should be if the third party were an ‘impartial spectator’, applauding only what deserves applause. Vanity begins only when we desire and seek from others praise that we do not deserve. Thus, even if there is ‘a certain remote affinity between them’ (VII.ii.4.9), insofar as both involve the presence of third parties, the ‘love of true glory’ and vanity could be equally branded as vices only through rhetorical sleight-of-hand. The presence of the third party or mediator is not sufficient to turn virtue into a vice. Smith’s biting criticism of Mandeville is understandable when we recall that Smith is heir to what has been dubbed the ‘sentimental revolution’ occurring in Scotland at the start of the eighteenth century, in reaction against the ‘cynics’ of the seventeenth century – chiefly Hobbes. The

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‘cynics’ held that everything in man, including pity, is motivated by selfishness. Mandeville fits right into this tradition. In contrast, the optimistic view of human nature promulgated by the ‘Scottish Enlightenment’ emphasizes men’s natural disposition towards compassion, benevolence and pity. Francis Hutcheson, Smith’s mentor at Glasgow, taught that there is in humanity an innate tendency towards ‘universal benevolence’, and his ethical system derived all the virtues from this irresistible propensity for compassion. Smith himself, in TMS, depicts the moral and social world as resting on a single principle: sympathy. At this point we need to take time out. Everything said so far is accurate, and yet, if we were to stop here, it would be utterly incomprehensible from the point of view of the history of Thought as it is usually written. Isn’t Adam Smith known as the founder of political economy, that system in which individuals impelled by self-love pursue their self-interest, contributing to the common good only unconsciously and unintentionally, as if an ‘invisible hand’ automatically realized collective harmony? And most of all, isn’t Mandeville generally presented as Smith’s far-sighted forerunner? This problem is of course that of the apparent inconsistency between TMS with its cornerstone of sympathy, and WN with its central concept of selflove. It arises only because sympathy is confused with benevolence, and self-love with selfishness – a dual misconstruction that leads to the judgment that sympathy and self-love are incompatible. If one recognizes in the concepts deployed by TMS the basic elements of the theory of mimetic desire avant la lettre, then it appears that self-love is in reality the reflexive modality of sympathy. Moreover, sympathy, which joins sentiments together, is bound to generate envy, which implies sentiments in conflict. In the end, Smith ends up with a system that is essentially the same as Mandeville’s: a mixture of self-love and envy produces public prosperity. How in TMS sympathy becomes envy – or invidious sympathy – is the precise point that this paper examines. It is a very limited point, although it commands the full comprehension of what constitutes the profound unity of Smith’s work as that of a moral philosopher and an economist.

II The logic of sympathy The only evidence that can be presented in defence of this thesis is that which can be provided by Smith’s text, yet this evidence is quite illuminating. II.A Sympathy is not benevolence True enough, it is quite possible to misinterpret the first few lines of TMS: How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others,

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and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. (TMS I.i.1.1) The fact that Smith belongs to the tail end of the Scottish Enlightenment sentimental revolution obviously only encourages the interpretive error whereby sympathy is confounded with benevolence. Smith, much like Hume, undeniably partakes of this sentimentalism. He too believes that moral judgment finds its ultimate basis in emotions and sentiments, and not in reason. God did not expect man’s reasoning capacity to teach him the difference between good and evil. Instead it was man’s nature, his motivating passions and his consuming appetites that were to be the source of an ability to draw this distinction. And yet, when it comes to one fundamental issue, Smith does break with the tradition of sentimentalism. He claims that of all the moral passions it is self-love, or the interest that one has for one’s own person, that is the strongest. Although benevolence possesses a superior moral value it only plays a secondary role in human affairs. Moreover, Smith, over and against Hutcheson, contends that actions motivated by self-love are not necessarily devoid of moral worth. Both TMS and WN privilege self-love over and above benevolence. To take but one citation from TMS: ‘What is it which prompts the generous upon all occasions, and the mean upon many, to sacrifice their own interests to the greater interests of others?’. To which Smith responds: It is not the soft power of humanity, it is not that feeble spark of benevolence which Nature has lighted up in the human heart, that is thus capable of counteracting the strongest impulses of self-love. . . . It is not the love of our neighbour, it is not the love of mankind, which upon many occasions prompts us to the practice of those divine virtues. It is a stronger love, a more powerful affection, which generally takes place upon such occasions; the love of what is honourable and noble, of the grandeur, and dignity, and superiority of our own characters. (TMS III.3.5) This is a remarkable passage because in a certain sense it suggests that the only way to overcome self-love is through even more self-love. The full complexity of Smith’s thought is epitomized in this conflict and combination of self-love with itself. By all appearances the entire structure of TMS depends on sympathy, and benevolence would seem to play only a minor role. Thus, it makes sense to conclude that sympathy is not coextensive with benevolence. Such a conclusion does not, of course, tell us anything about sympathy, nor about the relationship between sympathy and self-love.

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Sympathy presupposes a separation of beings, mitigated by the workings of the imagination. In order to grasp fully the originality of Smith’s concept of sympathy we must understand that it finds its origin in a very modern vision of society. This vision foregrounds the individual’s radical solitude and the irreducible distance between men, one that can only be bridged by the workings of the imagination. In our imagination we are constantly putting ourselves in the place of others, but in fact we never leave our own: As we have no immediate experience of what other men feel, we can form no idea of the manner in which they are affected, but by conceiving what we ourselves should feel in the like situation. Though our brother is upon the rack, as long as we ourselves are at our ease, our senses will never inform us of what he suffers. They never did, and never can, carry us beyond our own person, and it is by the imagination only that we can form any conception of what are his sensations. Neither can that faculty help us to this any other way than by representing to us what would be our own, if we were in his case. (TMS I.i.1.2) And thus, sympathy ‘does not arise so much from the view of the passion, as from that of the situation which excites it’ (I.i.1.10). The human subject as conceived by Smith is irremediably locked into the world of his own sensibility. What the imagination discovers are only the subject’s own sensations, never those of others: ‘It is the impressions of our own senses only, not those of his, which our imaginations copy’ (I.i.1.2). And yet Smith, much like Hutcheson and the ‘benevolists’ before him, refuses to fall into the Hobbesian trap that makes all passions a matter of selfishness. II.B Sympathy does not find its origin in selfishness Smith asks us to consider a situation in which we sympathize with the terrible grief of someone who has just lost his only son. He claims that what we experience is not the suffering that we would feel if, while retaining all our real psychological and sociological features, we were to imagine that we once had a son and had just lost him. For the compassion involved in such a case would be nothing more than the selfish fear of having a similar misfortune occur to oneself. Rather, Smith claims that the workings of the imagination do not allow us to exchange only our circumstances with someone, but also our personalities and characters. In thought I become the other. Otherwise, he goes on to ask, how could we explain the fact that a man can sympathize with the suffering experienced by a woman in labour?

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Who, then, is this subject engaged in a sympathetic identification with the other? Is he only really himself, given that he can never really escape from the prison-house of his own sensations? Or is he really the other in imagination – for otherwise sympathy would only be selfishness? In Smith’s theory what is real and what is imaginary never cease to interact. Smith notes that when someone sympathizes with the pain experienced by someone else, the subject can never really quite rid himself of the thought that this identification is of an imaginative nature only. And as this nagging and parasitical thought dulls the sensibility, the process of identifying with someone else is always a partial failure. Moreover, there are even some cases in which a perfect identification would make the experience of sympathy wholly impossible. In some cases sympathy depends on our being able to maintain an irreducible distance between ourselves and the object of our sympathy, a distance which however our sympathetic attitude will strive to eliminate. This distance necessarily exists, for example when we experience sympathy for the madman who is perfectly satisfied with his lot in life, or for the dead who no longer feel anything. These situations seem paradoxical, even impossible. And Smith himself almost admits as much:

0111 The compassion of the spectator must arise altogether from the consideration of what he himself would feel if he was reduced to the same unhappy situation, and, what perhaps is impossible, was at the same time able to regard it with his present reason and judgment. (TMS I.i.1.11; my emphasis)

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Constantly torn between himself and others, the subject as it is conceived by Smith suffers from a split that is constitutive of his very being. Many commentators, in France and across the Channel, have compared this conception of subjectivity to Diderot’s notion of the actor’s paradox. The actor is supposed to be capable of throwing himself passionately into a role while simultaneously maintaining the distance necessary for a considered judgment. The spectator finds himself in a situation comparable to that of the actor. Smith can hardly have been a stranger to this paradoxical configuration that combines an act of identification with one of distancing. Indeed, Hume even criticized Smith’s views on a subject that was quite topical in their day and age: how do we account for the pleasure that we experience when we witness the performance of a tragedy? Whatever the answer may be, we readily note the tremendous distance between this kind of question and the ‘methodological individualism’ characterizing economic theory today. As conceived by Smith, the human subject is radically different, not only from the homo oeconomicus of the economic theories that follow in Smith’s wake, but also from the rational beings postulated by the theories of the social contract (Morrow 1923: 60, 67). Many an economist or game theorist is trying these days to reduce

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Smith’s account to some kind of equilibrium outcome of the repeated interactions of self-interested individuals. If one accepts the criterion I proposed above to assess the relative validity of an interpretation of a superior intellectual work, those attempts fare poorly: by their own admission, their authors have to dismiss huge chunks of the work for being confused! II.C Sympathy is not contagion, but . . . The comparison of Hume’s concept of sympathy with that of his friend Smith is a fairly technical problem within the history of ideas. However what is at stake in this comparison is important for our main concern here, that is, the relationship between sympathy and contagion. In the case of Hume, the principle of sympathy is unambiguously presented as a principle involving the immediate (‘easy’) communication between persons of sentiments, emotions, judgments, manners, customs, and desires. It is in the nature of the human mind to be prone to imitation and contagion (Hume 1987, Essays I.XXI). In the Treatise on Human Nature Hume says that ‘the minds of men are mirrors to one another’ (Hume 1978, THN II.II.5, p. 365). Vividly he explains: ‘So close and intimate is the correspondence of human souls, that no sooner any person approaches me, than he diffuses on me all his opinions, and draws along my judgment in a greater or lesser degree’ (THN III.III.2, p. 592). Things are undeniably more complicated in Smith’s case. First of all he gives sympathy a passive sense whereby it is simply a matter of acknowledging that there is a correspondence between the spectator’s and the actor’s sentiments. This correspondence is the cornerstone for his theory of morality. Sympathy in this sense is the impulse that causes us to imagine ourselves in someone else’s place and thereby to experience sentiments that may be or not in accord with hers. If this accord can take place, we morally approve her conduct; if not, we disapprove of it. Such is the basis of Smith’s theory of morality: moral judgment involves either approval or disapproval, and approval rests on our capacity to sympathize. As already noticed, it is seldom the case that a harmony of sentiments is possible at all. Moreover, could this harmony of sentiments be established automatically along the lines of the kind of unmediated communication postulated by Hume, ethics would find itself wholly redundant. For, there is no place for ethics in a world where moral condemnation is impossible. On this score the distance separating Smith’s theory from that of Hume is evident. Smith, however, introduces a supplementary axiom into his system, the significance of which will prove to be crucial. The axiom in question is what he calls the ‘pleasure of mutual sympathy’ (I.i.2): a harmony of sentiments is pleasurable for both the spectator and the actor. In fact, this harmony turns out to be one of the principal sources of pleasure in life.

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TMS frequently expresses the actor’s fear of finding himself before an unsympathetic audience. The actor’s pleasure is increased, or his sorrow decreased, as the case may be, when he notes that the audience is relating to him sympathetically. In the case of the spectator things are not quite so simple. Hume put his finger on this problem and thus incited Smith to make his thoughts more precise. Two distinct sentiments must be distinguished in the event that the spectator sympathizes with the misfortune of another person. For on the one hand there is the sentiment of sympathy which, in this case, would be a feeling of pain. On the other hand, however, there is the sentiment of pleasure that finds its basis in the fact that the spectator knows his feelings to be in agreement with those of the observed party. In other words, the spectator approves of the feelings experienced by the misfortunate person. Generally speaking, the actor has more at stake in ‘the pleasure of mutual sympathy’ than the spectator. For everyone seeks approval from others for the feelings and passions motivating his actions. Now the actor knows by experience just how difficult it is to put oneself in the position of someone else. He puts himself in the place of the spectator trying to put herself in the place of the actor. We witness at work here the rigorous logical process whereby Smith recursively applies the operator sympathy to itself, giving it, in this manner, its true significance. This operator carried to the second power is that of active sympathy: we actively seek the sympathy of others, that is, we seek to sympathize with the fact of others sympathizing with us. Let us look at some of the features typifying this mechanism. Let us first of all note that this active operator of sympathy eliminates a logical difficulty typical of the first order operator. Following a basic postulate, the spectator does not have access to the feelings experienced by the actor. How, then, is the spectator to know whether the feelings she experiences as a result of sympathy really do correspond to those of the actor? How, then, can the spectator possibly be in a position to say whether she approves or disapproves of the actor’s feelings? The actor identifying with a spectator does not have to contend with this problem. He knows his own feelings and he is in the position to imagine the spectator’s sentiments, these latter being governed by the laws of first order sympathy. And these laws are well-known to the actor. He knows, for example, that the spectator does not have direct access to the actor’s emotions and only imagines them on the basis of what she sees. The actor knows that the spectator judges in function of her own criteria and according to her situation of exteriority. The actor knows that the spectator will have more or less trouble sympathizing with him depending on the type of passion in question. (It is, for example, more difficult to sympathize with bodily passions than it is to sympathize with those that stem from the workings of the imagination.) The actor knows all of this and he desires the spectator’s sympathy: so he adapts his own sentiments to the spectator’s as

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he conceives them. His evaluation of the situation is a copy of the other’s evaluation of the same situation. Sympathy is in the end a principle of imitation or contagion of sentiments, but, contrary to what the theatrical metaphor would suggest, it is not the spectator who imitates the actor, but rather the actor who imitates the spectator. However, in Smith’s social theatre, everybody is at once a spectator and an actor. Via a rather complex detour we rediscover a principle of imitation that resembles in some ways Hume’s conception of contagion. It is crucial to note that depending upon the particular circumstances, Smith attributes either an amplifying or an attenuating capacity to imitation. Imitation has, for example, a soothing effect in the case of an act of sympathy for somebody’s misfortunes. Compassion is a copy of the particular form of suffering that engenders it in the first place. Yet, like all copies, it lacks the intensity of the original.5 He who suffers projects himself into the spectator’s position, from where he observes his own woe. He notes that the spectator of his misfortune experiences a grief much less poignant than his own. Desiring, however, her sympathy, he attempts to tame the violence of his passion and to see it henceforth through the eyes of an ‘impartial’ spectator. Let us look at the opposite case. Smith claims that we may experience pleasure in reading a book to a friend of ours, even if it is a book that we have already read so many times as to find it too boring to read alone. For we would participate in our friend’s pleasure and make it our own. In the event, however, that the book should prove boring to our friend we would find it even more mediocre. It should be noted that in this case the communicative mechanism does not involve a recursive sympathy, but a straightforward ‘pleasure of mutual sympathy’. The following citation from Hume’s Treatise on Human Nature shows us the manner in which active sympathy might make this process more complex: In general we may remark, that the minds of men are mirrors to one another, not only because they reflect each others emotions, but also because those rays of passions, sentiments and opinions may be often reverberated, and may decay away by insensible degrees. Thus the pleasure, which a rich man receives from his possessions, being thrown upon the beholder, causes a pleasure and esteem; which sentiments again, being perceiv’d and sympathiz’d with, encrease the pleasure of the possessor; and being once more reflected, become a new foundation for pleasure and esteem in the beholder (THN II.II.5, p. 365) Let us at this point simply say that the pleasure derived from sympathy functions as a sort of ethical regulator that tends to reduce the differences between the various feelings that are brought into contact with each other. It tends to bring judgments and evaluations closer together. Thus, this

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pleasure increases at the very same time that it enhances social harmony. The pleasurable experience of sympathy is, then, auto-regulative. In the guise of a conclusion to this section let us recall once again the distance separating the Smithian (or Humean) subject from the homo oeconomicus who will appear on the scene at a later date. The latter is an isolated and self-sufficient being, capable of auto-determination. The former lives constantly in the eye of the other. This Smithian subject is fundamentally mimetic, always ready to lose itself in the many mirrors held forth by others.

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III.A The science of morality We have seen that Smith’s theory of moral judgment was based on the spectator’s feelings. It is for this reason that his theory of morality is presented as a ‘theory of moral sentiments’. At this level, Smith is no different from Hume or Hutcheson. These authors were empiricists. They observed the social fact of moral judgment and gave themselves the task of explaining it. Now, one of the most obvious characteristics of moral judgment is its spontaneous and immediate nature. As a result they concluded that moral judgment finds its origins in the equally spontaneous passions and feelings. Moral judgment was not, then, grounded in some ultimately transcendent norms that an act of pure reason might discover. The problem is that moral judgment exhibits other characteristics that seem much more difficult to reconcile with the properties of feeling and passion, such characteristics as objectivity, universality, and obligation. Hume’s principle of a contagion of feelings permits him to overcome this major difficulty. The reciprocal influence that individuals exert on one another engenders an organic social totality that is endowed with a life of its own and is quite autonomous in relation to its conditions of emergence. From that moment on a moral and political science of the universal laws governing social reality becomes perfectly conceivable. At this level as well Smith innovates, thereby rendering Hume’s demonstration more complex. Smith’s theory of consciousness, or of reflexive moral judgment, serves as the means whereby this complexification is achieved. We saw that sympathy had a tendency to be applied to itself; the same holds for the moral judgment that it engenders. A spectator approves of a given agent’s behaviour if he is able to sympathize with the passions or feelings motivating the actions in question. We showed that the recursion of sympathy is tantamount to the actor’s imitation of the spectator. From this we conclude that an agent approves of his own behaviour if and only if an observer approves of it. In Smith’s theory virtue is everything that incites an observer’s approval. And thus the task of accounting for the objectivity, universality, and binding nature of the moral law

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becomes a question of showing how these features find their genesis in the context of the spectator’s stance and position. What really defines the spectator is his position and the particular perspective that it gives him. The spectator stands outside the sphere of action. He does not take part in it and is properly speaking a ‘bystander’. The paradox typifying the spectator is, as we saw, as follows: on the one hand he maintains exteriority and indifference in relation to the other. It is not the spectator who suffers, enjoys, and acts, but the agent. Yet, at the same time, the spectator is also involved and occupies a position of interiority insofar as he tends to sympathize with the actor. Now, the actor knows about this position for he can infer its salient features from all those instances in his own life when he was actually in this very situation. Far from being a transcendental ideal, then, the spectator figure turns out to be a kind of average that emerges from everyone’s daily experiences of life in society.6 Even when the spectator (‘the man without’) is actually present in flesh and blood we know that he is imagined by the actor. It is only in thought that the actor puts himself in the spectator’s place, for he imagines the spectator imagining his own situation. The actor only retains the spectator’s position and the point of view that it affords, for he does not have access to anything else, especially not to the spectator’s real feelings. So, in the final instance it does not make the least bit of difference whether the position of the spectator is really filled. When the spectator’s position is empty, the actor occupies it fictitiously by an act of the imagination through which he becomes his own double. He watches himself as would an ‘impartial’ spectator. This is what we call the conscience (‘the man within’). Between the man without and the man within exists a complex network of relations. Sometimes their relation takes the form of a struggle between doubles. This struggle is a matter of the opposition between the ideal of a conscience that is definitively detached from its social origins and the reality of an ever-changing public opinion. Smith devotes an astonishing chapter to the ‘love of praise’ and the ‘love of praiseworthiness’ – that is, the desire to be able to approve of oneself (III.2). In this chapter Smith would like to demonstrate that while the desire to be worthy of the approbation of others stems from the desire simply to win their approbation, it nonetheless can acquire a certain degree of autonomy, and a relative independence, from it. He would also like to convince us that the moral conscience constitutes a ‘higher tribunal’ than the opinion of ordinary spectators. But it is not that simple! We could for instance very well reason as follows: what is the point of being recognized if one knows that one does not really merit the recognition? And if one knows that one deserves recognition, what does it matter if the others do not? When a man has bribed all the judges, the most unanimous decision of the court, though it may gain him his law-suit, cannot give him

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any assurance that he was in the right: and had he carried on his lawsuit merely to satisfy himself that he was in the right, he never would have bribed the judges. (TMS III.2.24) Perhaps, but in Smith’s days as in our own, men reward their admirers. There is a good reason to that: in those instances when the higher tribunal – our conscience – proffers no sure guidelines, we are obliged to turn to the general public for criteria of excellence and merit. We now understand how it is that Smith accounts for the binding and objective character of moral judgments, as if moral judgment were either dictated by some transcendent instance or given to mankind at birth in the form of an innate faculty. The logical form that characterizes the source of moral judgment is an auto-referential loop that puts a subject in contact with himself through an intermediary instance that is society. Although the subject seems to discover the moral law within himself, this law is, in fact, external to him. And its exteriority is directly related to the exteriority typifying society’s relationship to the individual. If one may speak here of transcendence, it is in the Durkheimian sense, that is, in terms of the transcendent nature of the social totality in relation to its parts. In fact, Smith’s sociological theory of morality makes him seem much more like the precursor to the Durkheim of The Elementary Forms of Religious Life (Durkheim 1979 [1912]) than the forerunner to the rationalist philosophers who were instrumental in making political economy into what we know it as today (Halévy 1901–03: 192).7 Smith is not trying to give a rational ground and justification to the moral facts that he observes. Rather, he is intent on describing the particular mode of functioning proper to these approvals and disapprovals. He wants to render visible the laws governing this system, to describe them and to explain their very genesis. Some commentators have gone so far as to say that there is not a single ethical proposition to be found in TMS. T.D. Campbell (1971: 52), for example, remarks that ‘those who expect to find in it a moral justification for the economic system described in WN will be disappointed’ (1971: 52). After all Smith himself writes the following: ‘the present inquiry is not concerning a matter of right, if I may say so, but concerning a matter of fact’ (II.i.5.10). The rapprochement with Durkheimian sociology should not, however, be pushed too far. In Smith’s social philosophy, the transcendence of society, far from being a given, ‘always already’ there, is brought about by the self-constitution of the social system itself. We are dealing with the endogenous production of an exteriority, a case of social bootstrapping, social self-transcendence or social autopoiesis. Smith’s social logic (1759) is by far much more advanced than Durkheim’s (1912). Smith consciously constructs his sociology of morality according to the model provided by Newtonian science. Smith understands this scientific

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project to be a matter of reconstructing the plurality of phenomena by means of a deduction on the basis of a very small number of laws. This is the model of science that we now know as the hypothetico-deductive form of explanation. Yet Smith’s work can better be characterized as a brilliant precursor to the science of complex systems and of self-organized totalities. Society is a system of actors and spectators that is closed in upon itself because every actor is also a spectator and vice versa. As a result of the system’s closure, new properties emerge which were in no way contained in the original elements – moral judgment and its governing laws, for example. It is true that these properties are not wholly arbitrary. Thus, the laws of moral judgment can be related to the empirical laws governing the principle of sympathy. And the universal nature of the latter contributes to the universality of the former. Another reason for the objective and non-arbitrary nature of the emergent social and moral order is its subjection to a major constraint: namely, this order has to be compatible with the conditions necessary for the preservation of society. Now, TMS shows precisely how the principle of sympathy is capable of engendering an order satisfying this criterion. This is the marvellous accomplishment of the ‘invisible hand’ – this hand of a God who, although he does not interfere with the functioning of the system, nonetheless originally conceived it in such a way that there would be a guaranteed compatibility between a teleological requirement and the purely causal functioning of the system. Here we see the articulation of both a scientific explanation and an ethical justification (Campbell 1975). We might even agree with Campbell who claims that Smith is utilitarian as far as the normative dimension of his system is concerned (1971: 217–19). This is a somewhat paradoxical assertion for, contrary to Hume, Smith insisted that an action’s utility – its contribution to the conservation of society, to the greatness happiness of the greatest number, and so on – has nothing to do with whether the action is approved of or not. In Smith’s system it is not mankind that is utilitarian, there being someone else to assume this role on its behalf: God. Instead of simply enlightening men, reason works in devious ways and harnesses nature to its ends. In this respect Smith undeniably prefigures the notion of the ‘cunning of reason’ proper to the idealistic and rationalistic philosophers of the nineteenth century (Cropsey 1975). III.B The science of society (economics) Now, at this point, a major difficulty arises, one that was destined to torment Smith throughout his life, finally causing him to add a key chapter to the sixth edition of TMS (and thus long after the publication of WN). This chapter is entitled ‘Of the corruption of our moral sentiments, which is occasioned by this disposition to admire the rich and the great, and to despise or neglect persons of poor and mean condition’ (I.iii.3).

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The difficulty in question is as follows: sympathy does indeed engender a social order compatible with the requirements of the conservation of society, but this order is not entirely compatible with the demands of morality. A science of morality is not, then, an exhaustive science of social phenomena. In order to understand this point fully, we must take up once more the question of the equivalence between active sympathy and the imitation of the spectator. You can only sympathize with yourself to the exact same extent that others sympathize with you. In other words, you can only love yourself to the same extent that others love you. Self-love coincides with the longing to be loved by others and is simply a particular case of the principle of active, reflexive sympathy. Upon careful reflection we recognize in this principle of reflexive or active sympathy a strange inversion of the evangelical message. The following is Smith’s actual formulation: As to love our neighbour as we love ourselves is the great law of Christianity, so it is the great precept of nature to love ourselves only as we love our neighbour, or, what comes to the same thing, as our neighbour is capable of loving us. (TMS I.i.5.5; my emphasis) Now a bifurcation occurs here in relation to the following question: who is the ‘neighbour’? Is he the ‘man within’ or the ‘man without’? We remain wholly within the sphere of morality in the event that the answer to this question is ‘the man within’. In this case self-love would take the form of a Stoic virtue, self-command, that is, the ability to control one’s passions and to keep them within the bounds that are most likely to win sympathy from the impartial spectator. The case is, however, somewhat different if we are dealing with real spectators, and if the actor were more desirous of being praised and admired than of deserving praise and admiration. The actor would know that there are more expeditious ways of winning praise. Self-love here takes the form of self-interest, of the economic motive, the desire to improve one’s material condition, to increase one’s wealth. Not because the riches acquired would be in themselves a source of satisfaction – as a good Scot, Smith has no words harsh enough to express his scorn for this notion, as we shall see – but because they would have the property of attracting to their possessor the sympathy of those who lack them. These people mistakenly attribute virtues to wealth that it does not have. But it is because they are mistaken, and because they covet it, that in the end they are not mistaken. Wealth indeed has the virtues with which it is credited, but only because it has been credited with them. It is this fool’s game, a giant variation on the theme of sympathy, that generates the wealth of nations and what we call the economy – but not without causing grave harm to morality.

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It is crucial to follow Smith’s argument step by step because its complexity and contradictions go to the very heart of the problem that concerns us here. First we must establish a certain comparison which, to the best of our knowledge, has never been undertaken by commentators on Smith’s work. The comparison concerns Part I and is one between chapter 5 of section ii – ‘of the selfish passions’ – and section iii, which deals, directly or indirectly, with the stability of social differentiation. Having examined several of the passions that more or less engage our propensity for sympathy, Smith arrives at the ‘selfish passions’: the joy or sorrow that is experienced as a result of one’s own good or bad fortune. Smith asks whether these passions incite the sympathy of the spectator and concludes that it is the small joys and great sorrows that are most likely to do so. For generally speaking our envy makes it impossible for us to share wholeheartedly in the happiness of someone successful, no matter how deserving. It is here that we find Smith’s delightful remarks on the ways in which the happy few seek to hide their true well-being behind an appearance of modesty, a fear of envy being the explanation of this reserve (I.ii.5.1). For it is precisely envy that prohibits sympathy from playing its harmonizing role. Envy is the opposite of sympathy because it tends to oppose feelings to one another instead of harmonizing them. Gradually, however, Smith modifies his analysis, and phrases such as the following start to appear on a regular basis: ‘We readily, therefore, sympathize with [ joy] in others, whenever we are not prejudiced by envy’ (I.ii.5.3; I.iii.1.9). In this passage envy ceases to be a principle contrary to sympathy and becomes instead a possible exception to it. And finally, we have the astonishing turnabout: The obvious observation, therefore, which it naturally falls in our way to make, is, that our propensity to sympathize with sorrow must be very strong, and our inclination to sympathize with joy very weak. Notwithstanding this prejudice, however, I will venture to affirm, that, when there is no envy in the case, our propensity to sympathize with joy is much stronger than our propensity to sympathize with sorrow. (TMS I.iii.1.4–5) The reader is baffled by these statements even if they are followed by a series of embarassed explanations. It is true that the reader may be willing to admit that it is less agreeable to partake in someone else’s sorrow than it is to share his joy. Yet Smith had already convinced the reader that the world’s equilibrium and stability depended to a large extent on the peaceable virtues related to commiseration. Before long, however, we come to understand what it is that Smith was getting at. His task is to account for the genesis and preservation of a hierarchical social order. So he suggests that the necessary conditions are

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to be found in ‘this disposition to admire, and almost to worship, the rich and the powerful and to despise, or, at least, to neglect, persons of poor and mean condition . . .’ (I.iii.3.1). Then follows the famous demonstration in which many contemporary commentators have claimed to find the source for modern theories about ‘conspicuous consumption’ starting with the work of Veblen (West 1976: 40; Lovejoy 1961: 208–15). In our opinion this is a serious misinterpretation, and we will therefore cite this crucial passage at some length:

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It is because mankind are disposed to sympathize more entirely with our joy than with our sorrow, that we make parade of our riches, and conceal our poverty . . . For to what purpose is all the toil and bustle of this world? What is the end of avarice and ambition, of the pursuit of wealth, of power, and pre-eminence? Is it to supply the necessities of nature? The wages of the meanest labourer can supply them. . . . do they [those who are fortunate] imagine that their stomach is better, or their sleep sounder, in a palace than in a cottage? The contrary has been so often observed, and, indeed, is so very obvious, though it had never been observed, that there is nobody ignorant of it. From whence, then, arises that emulation which runs through all the different ranks of men, and what are the advantages which we propose by that great purpose of human life which we call bettering our condition? To be observed, to be attended to, to be taken notice of with sympathy, complacency, and approbation, are all the advantages which we can propose to derive from it. It is the vanity, not the ease, or the pleasure, which interests us. But vanity is always founded upon the belief of our being the object of attention and approbation. The rich man glories in his riches, because he feels that they naturally draw upon him the attention of the world, and that mankind are disposed to go along with him in all those agreeable emotions with which the advantages of his situation so readily inspire him. . . . The poor man, on the contrary, is ashamed of his poverty. He feels that it either places him out of the sight of mankind, or, that if they take any notice of him, they have, however, scarce any fellow-feeling with the misery and distress which he suffers. He is mortified upon both accounts; for though to be overlooked, and to be disapproved of, are things entirely different, yet as obscurity covers us from the day-light of honour and approbation, to feel that we are taken no notice of, necessarily damps the most agreeable hope, and disappoints the most ardent desire, of human nature. The poor man goes out and comes in unheeded, and when in the midst of a crowd is in the same obscurity as if shut up in his own hovel. . . . The man of rank and distinction, on the contrary, is observed by all the world. Every 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. . . . [I]t is

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Jean-Pierre Dupuy 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. . . . 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 that leisure, all that ease, all that careless security, which are forfeited for ever by the acquisition. (TMS I.iii.2.1; my emphasis)

This remarkable passage contains the key to the tensions in Smith’s thought. Smith is trying to explain a fact that he has observed and that does not go without saying: those who are rich and powerful display their riches in order to attract the gazes and admiration of others. Now, this phenomenon is problematic. Material wealth and especially movable property has not always and everywhere been a mark of distinction that one displays in order to win the applause of the masses. As Smith must know very well, since he discusses it, the fear of envy – of one’s own envy as well as of that of others – can cause people to hide their possessions and feign destitution. Ever since the impact of Veblen’s thought, little concern has been given to such subtleties. Thus, Veblen’s many disciples claim that an innate desire for distinction motivates the human species to pursue prestige, the recognition of others, through conspicuous consumption. Yet the principle of distinction is a principle of opposition, rivalry, and war. And thus Veblen and his disciples are up against a major obstacle: they have to make plausible the idea that we seek a good by seeking the admiration of others, an admiration that stems from our having triumphed over them. Yet there is plenty of evidence to suggest that such disparaging and triumphant behaviour can only win us the envy, jealousy, and hatred of others. Veblen tries to resolve this difficulty by bluntly assimilating envy to admiration, which simply puts an end to the discussion. Thus it is rather surprising that commentators could see profound similarities between the Smith of TMS and Veblen. Unlike Veblen, Smith does not ground the social dynamic in a principle of distinction or in some pursuit of difference. Rather, he accounts for the stability of social relations by invoking a principle of harmony and a desire for similarity: sympathy. What does the rich or powerful person really want when he attracts the gaze of others? The pleasure of their sympathy, that is, the joy of experiencing a harmony between their feelings and his own. What do the spectators who observe this rich person stand to gain? The pleasure of sympathy, that is, the enjoyment of a vicarious taste of success. In this manner everybody benefits: the rich man knows that he really does occupy

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a desirable position, and the spectators participate in a happiness beyond their means. Smith thus seems to get around the trap called envy. He is at pains not to emphasize the quality of the gaze which men cast at those whom they choose to admire. Instead he focuses on the convergence of judgments that is realized by the principle of sympathy. We now understand why Smith, even at the risk of contradicting himself, claimed that there exists in mankind a strong propensity to sympathize with the joy of others. This claim is, as we have seen, absolutely essential to the rest of his argument. Smith’s way of dealing with our relationship to the poor is symmetrical to his analysis of the rich man’s relationship with his audience. For the unfortunate does not suffer so much from the disdain that others might have for his plight (if indeed it is disdain, and not just indifference that is in question) as from ‘that shame, that consciousness that his misery is felt by himself only, which is of all sentiments the most insupportable’ (I.iii.2.10). But has Smith really managed to rid himself of the problem of envy? The attentive reader will have noticed a slippage towards the end of the citation, a furtive ‘greatness, the object of envy,’ which contradicts the premises of the entire demonstration: ‘Joy is a pleasant emotion, and we gladly abandon ourselves to it upon the slightest occasion. We readily, therefore, sympathize with it in others, whenever we are not prejudiced by envy’ (I.ii.5.3; my emphasis). This contradiction is not, in fact, the product of mediocre and negligent thinking. Smith locates this contradiction in the very logic of interpersonal relations. It should be emphasized that ‘sympathy’ for the success of the great and powerful has nothing to do with the feeling of benevolence (just as there clearly is no such thing as compassion for the misfortunate). This feeling of sympathy cannot be distinguished from the desire to appropriate the possessions belonging to these great men. The desire to be like them is inevitably also a desire to have what they have. As a result the gazes directed at a model are always ambiguous. From the point of view of the model, these gazes have a positive value, on the one hand, for they confirm the value of his position. On the other hand, however, these same looks constitute an evil, for they contain a potential threat. From the point of view of those doing the looking, their gaze is a good because it provides them with a sense of direction that they lacked, it attracts them to that which is worth their pursuit and effort. On the other hand, however, this same gaze constitutes an evil because it unleashes all the torments associated with envy. Evil is inscribed within good, the maggot is at home inside the fruit. This is the corruption of morality. Smith says the following about this inclination to venerate the great in the same way that we respect the virtuous, about this propensity to neglect the destitute just as we turn away from vice: ‘though necessary both to establish and maintain the distinction of ranks and the order of society’,

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they are, ‘at the same time, the great and most universal cause of the corruption of our moral sentiments’ (I.iii.3.1). In his introduction to his edition of TMS, E.G. West (1976: 39) paraphrases these words as follows: ‘those instincts in human beings which are the supposed agencies for ultimate harmony are both constructive and destructive.’ Although envy and sympathy are opposed to each other, they are indistinguishable. The principle of union underlying the stability of social distinction is simultaneously a principle of opposition and, thus, a threat to this stability. Sympathy contains envy in both senses of the word ‘contain’: to have within oneself and to keep in check. An analogous demonstration could be made concerning Smith’s theory of justice and punishment; it appears that punishment, the primordial condition of justice and social order, is identical to revenge, which can destroy that order. Punishment contains revenge, in the two senses of the verb. Within the context of the set of axioms for social science that we are trying to extract from Smith’s work, it is possible to reach a greater level of abstraction. Let us reiterate some of the main points of our discussion. The operator of self-reflexivity is none other than the spectator’s gaze. A subject can only refer to himself by referring to the spectator’s act of referring to him. This is the logic of indirect self-reference. Some examples: I can only judge myself on the basis of the impartial spectator’s judgment of me: this is called having a conscience. I can only love myself to the extent that the spectator loves me: this is called self-love and one of its possible modalities is the virtue of self-command. Let us now deal with the relation between subject and object: I judge an exclusive object to be desirable if and only if I believe that the spectator considers it desirable. If, then, in order to desire an object I must offer it as fodder to the other’s desire, I venture onto a path that is perilous by nature. And if we are to believe Smith, this sort of perilous desire is what underlies our interest in ‘economic’ forms of wealth – which is extraordinary given that Smith is the father of political economy. True enough, in the case of this kind of desire I do win the ‘sympathy’ of my spectators and in so doing nourish my sense of self-esteem. Yet this sympathy cannot be distinguished from its opposite: envy. This combination of selflove and envy turns out, then, to be the element that is most crucial to the permanence and stability of the social order. And it is in the paradoxical relationship between self-love and envy that we detect profound similarities between the thought of Smith and Mandeville. Thus we understand why in spite of his harsh criticisms of Mandeville, Smith was forced to concede that there was much truth in his provocative essay.

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What it is crucial to understand is that the combination of self-love and envy is, just like virtuous self-love and conscience, an emergent manifestation of the same operator through the workings of which society closes in onto itself:8 the operator of sympathy.

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French commentary on Smith in the last decades of the twentieth century has been influenced by the thesis that holist sociologist and anthropologist Louis Dumont (1977) defended so vigorously in his masterpiece, Homo aequalis: in order for economics to be constituted as an autonomous discipline having its own separate object domain within the sphere of human affairs, two conditions had to be met. First of all, economics had to be distinguished from politics. The second requirement, which is less obvious, is that economics had to free itself from the demands of morality. The means necessary for this emancipation were provided by the advent of the modern individual who, released from the rigid social codes that locked the members of traditional societies into networks of obligations and constraints, is completely freed from subordination to an encompassing and integrating social totality. From the point of view that characterizes the stance of the modern individual, who has ever since occupied the centre of the social world, social facts – the relations between men – appear under the guise of objects that are subject to laws analogous to those governing the motions of bodies in the physical universe. Once social relations are understood in this light, a science of man inspired by the natural scientific model becomes conceivable (Dumont 1977: 30, 84, 101). This does not, however, mean that the relationship between economics and morality had been settled. Indeed Dumont shows that in order to establish itself as an autonomous science, economics had to do more than simply demonstrate its own internal coherence (without which it would not be a separate discipline), for it also had to prove that this coherence was oriented towards the common good. In the absence of such a proof the very autonomy of economics would be threatened, for its domain could then be reoccupied by the traditional moral doctrines. What finally was at stake, then, was not so much an expulsion of morality from the domain of economics as the attempt to show that this science embodied its own specific morality. In other words, a kind of economic ‘specialization’ of morality was brought about (Dumont 1977: 83). Thus economics never lost its normativity, as Gunnar Myrdal (1953 [1928–9]) claims in a bynow classic study. According to Dumont the science of economics sought to achieve its dual objective (of internal coherence and orientation to the common good) by means of a dual postulate. This dual postulate or presupposition was that of the selfishness (or self-love) of homo oeconomicus, on the one hand, and that of the mechanism of the invisible hand, on the

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other. It was the invisible hand that was to guarantee the automatic production of collective harmony as the result of the addition of these selfish individual strivings. There exists, then, a domain within the general sphere of human affairs that is distinct from all other activities, a domain where morality and traditional modes of socialization are useless or even harmful. Within this domain human agents unknowingly contribute to the realization of the common good, in spite of the fact that they pursue their own selfish interests. Given these basic presuppositions economists are quite capable of carrying the argument forward. Is it not, for example, the case that most economists regard Smith’s invisible hand theory as the rough sketch for a full-fledged theory of general economic equilibrium (Arrow and Hahn 1971: Introduction)? Selfishness is thus conflated with the ability to perform a rational calculation as to which actions will maximize personal gain; as such, it loses all moral, or rather, immoral, connotations. It is possible to be ‘selfishly’ altruistic or benevolent if being a do-gooder increases personal satisfaction. Smith’s description of the transmutation whereby selfinterest becomes an ingredient in the public good was initially perceived as somewhat paradoxical – and this in spite of his attempts to attenuate the ‘shocking’ nature of Mandeville’s thesis. Yet the air of paradox that previously accompanied Smith’s model has by now vanished. The mystical aura that once surrounded the mysterious operations of the invisible hand has been replaced by the well-known features of a system of simultaneous equations. For Dumont, the symbolic date of the liberation of economics from the demands of morality is marked by the publication of Mandeville’s Fable of the Bees (1924 [1723]). But if Dumont’s general thesis is accurate, there is another moment in the history of ideas when its validity can be verified in an even more striking manner. I am, of course, referring here to the relationship between Adam Smith’s two great works, TMS and WN. One would think that the process whereby the moralist becomes an economist would reproduce in an abridged form the movement of thought responsible for emancipating economics from morality. This is indeed Dumont’s opinion. Dumont writes that as far as Smith is concerned: the economic activity is the only activity engaged in by man that requires nothing more than selfishness as a guarantee of its success. For this reason economic activity finds itself in opposition to the general sphere of moral sentiments, the latter being rooted in sympathy. (Dumont 1977: 83; my emphasis) The ‘opposition’ that Dumont detects between Smith’s two works is not a matter of contradiction since it refers to two distinct domains: to the general sphere of human affairs, on the one hand, and on the other, to the distinctly separate sphere that economics acquired through its liberation. Thus the

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internal movement of Smith’s work would reproduce the general movement described by Dumont. This thesis is in keeping with the abundant literature in English which also solves ‘das Adam Smith Problem’ in terms of a distinction that is drawn between the different spheres of human activity. In the non-economic sphere, the principles guiding judgments and the motives governing behaviour involve the full range of the moral sentiments, and most importantly, sympathy and benevolence. In the economic sphere, however, self-interest is paramount, and the harmonious cohesion characterizing this sphere of activity ‘owes nothing to sympathy’ (Raphael 1975: 96). The boundaries of the economic sphere are recognized in that they define an exceptional space within the domain of moral sentiments (and this exception will become the rule when the economy finally invades the whole of human activity). If the interpretation of the operator of sympathy in terms of mimetic desire put forward by the French intersubjectivists has some validity, the account of the emancipation of economics in terms of a specialization of domains collapses altogether. The exegetic discussion of a seemingly minor point in TMS appears to have a momentous relevance as regards a fundamental issue: how could the economy become the ‘essence of the modern world’, to quote Hegel, another close reader of Adam Smith. It is wrong-headed to think of the economy in terms of a specialized domain that is separate from the sphere of morality. What is at stake in Smith’s philosophy are two modalities, two possible manifestations of the same morphogenetic principle. If, then, there is a scission in Smith’s work, it is not one that separates morality from economy construed as a distinct domain where the scientific approach is applicable. Morality and the economy are the objects of exactly the same science. The schism or epistemological rupture in question is prior to these objects. It is inscribed within the advent of a morphogenetic science of the social, one that anticipates a systems-theoretical approach to society.

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The language barrier is probably the major culprit. Nowadays a scholar who does not publish in English is condemned to obscurity. This situation, whether a good thing or not, is fairly novel though. This is the name given the French school by the British School of Critical Realism, led by Cambridge University economist Tony Lawson (1997). For the sake of simplicity, I will adopt that name. This is not the way the school is called in France, though. It goes by the name of Économie des conventions, where the word ‘convention’ refers to the Humean notion as conceptualized and formalized by David K. Lewis in his book Convention (1969). Some of the milestones in the French school’s production are: Dupuy (1989, 1992) and Orléan (1994). In the vast, generally excellent recent literature in English on the subject I pick up two outstanding illustrations. First, the work of D.D. Raphael, whose introduction with A.L. Macfie to the 1976 edition of TMS spawned the new scholarship. In a 1975 paper, ‘The impartial spectator’, Raphael brilliantly compares Smith’s theory of conscience with John Rawls’s theory of justice and

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Freud’s account of the super-ego, and concludes, rightly so in my mind, that Smith can certainly stand comparison with them. However, he eventually deems Smith’s specular theory of approval ‘too complicated to be acceptable’ and feels compelled to excuse Smith on the ground that ‘like anyone else, [he] could make a mistake in the details of his theory’ (Raphael 1975: 99). The interpretation I am going to propose renders this kind of condescension unnecessary: Smith’s scheme is complex, not complicated, in the technical sense that ‘complexity’ has acquired in the theory of self-organizing, autopoietic systems. The second illustration is a remarkably perspicuous paper by Elias Khalil, ‘Is Adam Smith liberal?’ (2002). Khalil argues in it that Smith was unwittingly using the word ‘sympathy’ in two totally different meanings. One is transporting ourselves into someone’s shoes. The other is ‘vicarious sympathy’ as when the opposite happens – imagining the good fortunes of others as happening to our own station – which is the basis of admiring the rich and political order. I will show that the theory of mimetic desire, which, I claim, is indeed Smith’s theory, makes those two moves appear one and the same, and that Smith knew exactly what he was doing when he was coalescing them. It is certainly preferable to allow such ancient judgments as Jacob Viner’s (1958: 241) to sink into oblivion. Viner wrote: ‘The one personal characteristic which all of his [Smith’s] biographers agree in attributing to him is absentmindedness, and his general principle of natural liberty seems to have been one of the things he was most absent-minded about’. I am summing up here the work that I published in 1987 in the sociological journal founded by Durkheim and Mauss, L’Année sociologique. This publication (Dupuy 1987) has spawned an important series of critical commentaries. I have not found any reference to this literature in the English-speaking world. I am therefore extremely grateful to the Editors for giving me the opportunity to somewhat bridge the divide between two different cultural worlds. Smith refers to the original as the ‘substance,’ and to the copy as the ‘shadow’ (VI.ii.1.1). Smith has a term for this average: the ‘golden mean’ (V.2.7). Elie Halévy comments, in his chapter on Smith and Bentham, that ‘The role of the theoreticians of the new political economy will be to pervert the AngloSaxon naturalism into a form of rationalism’ (p. 192). In the contemporary language of the theory of self-organizing or autopoietic systems, one would say that these are three eigenbehaviours of the social system taken as an organizationally closed system (Varela 1979).

Bibliography Arrow, K.J. and Hahn, F.H. (1971) General Competitive Analysis, San Francisco, CA: Holdenday. Campbell, T.D. (1971) Adam Smith’s Science of Morals, London: George Allen & Unwin. –––– (1975) ‘Scientific explanation and ethical justification in the Moral Sentiments’, in Essays on Adam Smith, A.S. Skinner and T. Wilson (eds), pp. 68–82, Oxford: Clarendon. Cropsey, J. (1975) ‘Adam Smith and political philosophy’, in Essays on Adam Smith, A.S. Skinner and T. Wilson (eds), pp. 132–53, Oxford: Clarendon. Dumont, L. (1977) Homo aequalis: Genèse et épanouissement de l’idéologie économique, Paris: Gallimard.

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Dupuy, J.-P. (1987) ‘De l’émancipation de l’économie: Retour sur le “problème d’Adam Smith”’, L’Année sociologique, 37: 311–42. –––– (ed.) (1989) ‘L’Économie des conventions’, special issue of Revue économique, 40: 361–400. –––– (1992) Le Sacrifice et l’envie: Le libéralisme aux prises avec la justice sociale, Paris: Calmann-Lévy. –––– and Varela, F.J. (1992) ‘Understanding origins: an Introduction’, in Understanding Origins: Contemporary Views on the Origin of Life, Mind and Society, F.J. Varela and J.-P. Dupuy (eds), pp. 1–25, Dordrecht, Netherlands: Kluwer Academic Publishers, Boston Studies in the Philosophy of Science, vol. 130. Durkheim, E. (1979) [1912] Les Formes élémentaires de la vie religieuse, Paris: PUF. Girard, R. (1965) Deceit, Desire, and the Novel, Baltimore, MD: The Johns Hopkins University Press. –––– (1979) Violence and the Sacred, Baltimore, MD: The Johns Hopkins University Press. –––– (1986) The Scapegoat, Baltimore, MD: The Johns Hopkins University Press. Halévy, E. (1901–3) La Formation du radicalisme philosophique, Paris: Felix Alcan. Hume, D. (1978) A Treatise of Human Nature, L.A. Selby-Bigge and P.H. Nidditch (eds), 2nd edn, Oxford: Clarendon Press. –––– (1987) Essays, Moral, Political, and Literary, E.F. Miller (ed.), Indianapolis, IN: The Liberty Fund. Khalil, E. (2002), ‘Is Adam Smith liberal?’, Journal of Institutional and Theoretical Economics, 158: 664–94. –––– (2003) ‘Behavioral economics and the transactional view’, Transactional Viewpoints, 2: 1–8. Lawson, T. (1997) Economics and Reality, London: Routledge. Lewis, D.K. (1969) Convention, Cambridge, MA: Harvard University Press. Lovejoy, A.O. (1961) Reflections on Human Nature, Baltimore, MD: The Johns Hopkins University Press. Mandeville, B. (1924) [1723] The Fable of the Bees, F.B. Kaye (ed.), Oxford: Clarendon Press, 1924; repr. Indianapolis: The Liberty Fund, 1988. Morrow, G.R. (1923) ‘The significance of the doctrine of sympathy in Hume and Adam Smith,’ Philosophical Review, 32: 60–78. Myrdal, G. (1953) [1928–9] The Political Element in the Development of Economic Theory, London: Routledge & Kegan Paul. Orléan, A. (ed.) (1994) Analyse économique des conventions, Paris: Presses Universitaires de France. Raphael, D.D. (1975) ‘The impartial spectator’, in Essays on Adam Smith, A.S. Skinner and T. Wilson (eds), pp. 83–99, Oxford: Clarendon Press. Smith, A. (1976) The Theory of Moral Sentiments, D.D. Raphael and A.L Macfie (eds), Oxford: Clarendon Press; reprinted, Liberty Press (1982). Varela, F.J. (1979) Principles of Biological Autonomy, New York: North Holland. Viner, J. (1958) ‘Adam Smith and laissez faire’, in The Long View and the Short, pp. 213–45, Glencoe, IL: Free Press; reprint of Journal of Political Economy (1927) 35: 198–232. West, E.G. (1976) ‘Introduction’, in Smith, A. The Theory of Moral Sentiments, E.G. West (ed.), pp. 17–43, Indianapolis, IN: Liberty Classics.

Adam Smith’s natural theology of society Brendan Long

This paper seeks to present an interpretation of the religious content in Smith’s thought that emphasises the role of natural theology. The hypothesis to be considered is that natural theology is central to his anthropology and thus to the whole corpus. The argument proceeds in the following fashion. The first section simply seeks to account for why Smith did not leave a serious theological work. Once this first hurdle is jumped, examination of his earlier work on religious topics shows a theological end to the natural order as evinced by a social progression toward monotheism. This serves as an introduction to a discussion of Smith’s use of the word ‘Nature’. After cataloguing the various interpretations, Smith’s own views are interpreted and a new taxonomy is considered. This yields ‘Nature’ as the efficient cause of a divine final end. The efficient causality occurs in and through natural human sentiments. The key notions of sympathy, selflove and the spectator (real and impartial) are then discussed. These theological notions are then assembled together to form a broad theory of interpretation for Smith’s theological ideas. The outcome is one that emphasises the reliance of the natural theology on Christianity’s Golden Rule.1

I Smith was not a theologian Smith’s work is an attempt to form a descriptive account of the primary processes by which society develops and functions. He offers a panoramic vista that encompasses rhetoric, theology, science, economics, and the development of legal systems, philosophical ethics and social policy. Even the more economic work, An Inquiry into the Nature and Causes of the Wealth of Nations reveals a very broad perspective. Morrow has described it as a history of the development of Western civilization (Morrow 1984 [1927]: 168–9). The corpus as a whole constitutes the project of attempting to provide an account of the final and efficient causes of human social behaviour and the institutions that support it. Natural theology is central to this account. Analysis of Smith’s religious thought is complicated by the fact that his work on natural theology was destroyed with his other unpublished

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papers just before his death. Although natural theology was the subject of Smith’s first series of lectures at Glasgow, the lecture notes on this topic appear forever lost. The question can be asked why he never published a dedicated work on a religious topic. However, the absence of a dedicated theological work should not surprise us, as Smith was more of a Christian philosopher than a theologian proper. He held Logic and Moral Philosophy Professorships not the Divinity chair. So we could certainly not have expected him to have written a treatise on Scripture or the Fathers. To have written such a work would have been akin to a Minister speaking outside his portfolio.2 Moreover, Smith’s academic methodology was to publish that which he had first tested in his lectures at Glasgow. As he never lectured on divinity proper he might have thought his knowledge insufficient to produce an elaborate theological work. From this we can conclude that Smith did not see himself as a theologian but rather a writer moving in a broad Christian tradition.

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In the absence of his lecture notes on natural theology, his attitude to the tradition must be reconstructed from scanty biographical notes and an examination of the limited argumentation present in his published work.3 Smith’s early work ‘History of Astronomy’ (HA) provides a somewhat novel presentation of the development of religious thought. Religion seems to develop with society from the polytheistic to the strong monotheism of Christianity. What is interesting is that he believes that this is implicated with his notion of progress, and those developments in theism parallel developments in science. In fact, science leads to the first real theism for Smith. Polytheism for Smith is not really theism at all, but a ‘vulgar superstition which ascribes all the irregular events of nature to the favour or displeasure of intelligent, though invisible beings, to gods, daemons . . .’ (Smith 1980 Essays on Philosophical Subjects (EPS), HA III.2). In the case of the polytheists these invisible beings supplied the necessary epistemological filler to satisfy wonder at elements of nature that were irregular and unexplained. Life was precarious and people were fearful and so turned to superstition. In this context Smith gives the first reference to the ‘invisible hand’: ‘Fire burns, and water refreshes; heavy bodies descend, and lighter substances fly upwards, by the necessity of their own nature; nor was the invisible hand of Jupiter ever apprehended to be employed in those matters’ (HA III.2). Thunder, lightning and sunshine are the more irregular events ascribed to Jupiter’s anger or favour. So the ‘invisible hand’ here refers to the action of the divine to explain a central unexplained reality. In this case, the divine agent is pagan and the unexplained reality is the irregular force of nature.4 In Smith’s imagination the pagan/disorder and Christian/order disparity is important.5 Paganism is associated with lower levels of scientific and

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economic development. However, when the process of survival became more secure due to the rule of law and greater economic development, Smith says that we then became less fearful and more curious (Smith 1980 EPS, ‘The History of Ancient Physics’ (HP), 9f.). We were then less likely to accept the pagan notion of ‘invisible beings’ as an explanation for unexplained phenomena. This principle is developed more explicitly in HP. Here Smith interprets the development of scientific inquiry with the ancients as more or less inevitably leading to theism. Initially, the world was seen as disorderly and chaotic, but it came to be considered as a complete machine, as a coherent system, governed by general laws and directed by general ends, viz. its own preservation and prosperity (HP 9f.). These ancient ‘sages’ realised that the world bore a resemblance to machines produced by ‘human art’. Consequently, the view emerged that ‘in the original formation of the world’ there must have been employed an art resembling the human art, but as much superior to it as the world is superior to the machines which that art produces: The unity of the system, which, according to this ancient philosophy, is most perfect, suggested the idea of the unity of that principle, by whose art it was formed; and thus, as ignorance begot superstition, science gave birth to the first theism that arose among those nations, who were not enlightened by divine Revelation. (EPS, HP 9) Only human artifice produces harmony and order out of chaos. The harmony and order of the world must be the result of an intelligent and sublime will, analogous to but transcending the human mind and will. This sense of the divine purpose operating in the world as the principle of harmony is a key element of Smith’s whole world view. II.A Cataloguing various readings of ‘Nature’ in Smith Smith’s natural theology is embedded in his understanding of the term ‘Nature’, particularly as outlined in The Theory of Moral Sentiments. Within the corpus the reference to ‘Nature’ is pivotal, but not univocal. This section seeks to list some of the more significant contributors to the discussion. Although, the more secular reading of Smith is more popular, it is important to identify the long tradition of interpreting this concept theologically. Hume’s discussion of nature is a good place to begin the list of interpretation of Smith’s sense of ‘Nature’. This would have influenced Smith. They were very close friends in the long period of the evolution of TMS. Hume says of this word that ‘there is none more ambiguous and equivocal’ (Treatise III.ii: 474). Hume defines the natural as that which can be

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opposed to miracles, or the rare and unusual, or to artifice. Smith uses ‘Nature’ in difference senses in varying contexts. Some commentators seem to want to interpret Nature in a purely secular fashion. Nature is seen as a reference completely isolated from any sense of transcendent or theological considerations. Griswold (1999: 314f.) has identified seven different senses of the word in Smith. However, the categorisation is far from precise. He reads Smith as saying that Nature represents: the essence of a substance, the conventional, contrary to the artificial, what is given to us, non-supernatural, the teleological and the totality of things. Griswold’s categories may be seen as corresponding with what one might now find in a dictionary, but they do not really open up a window into the Smithian corpus. His description of Nature which is ‘given to us’ is a ‘blurry’ sense of the word that allows Smith to refer to Nature in the sense of the substance without raising ‘theological or metaphysical questions’. Moreover, he says that Smith’s use of natural is independent ‘of any notion of the supernatural’.6 It must be said that this position is typical of many contemporary commentators. In contrast, other significant commentaries over a long period of time have emphasised the theological sense of Smith’s use of the word Nature. One commentator is the unique figure, Thorstein Veblen, who suggests that Smith consistently drives an epistemological wedge between the natural (which commonly means the same as the ‘real’ in WN) and the actual. Nature is not seen as operating from cause to effect. It has an ‘extra-mechanical’ element: The discrepancy between the actual, causally determined situation and the divinely intended consummation is the metaphysical ground of all that inculcation of morality and enlightened policy that makes up so large a part of Adam Smith’s work. The like, of course, holds true for all moralists and reformers who proceed on the assumption of a providential order. (Veblen 1899: 398, n.*) For Veblen’s nature is seen as having a teleological orientation. What is actual is the instantiation of Nature. So Veblen sees Smith’s world existing within the orbit of two suns. The first is that habit of reflection and explanation, cultivated by the Western tradition since antiquity that argues from final causality and constructs its account of the world from metaphysical and theological presuppositions. It is the principle by which we ought to behave and function (the natural). The second star is the description of human nature in terms of causal argumentation (in economic terms this is largely to do with self-interest and a sense of utility). This is a description of the way things are (the actual). How is it that the natural and the actual interact? The ‘ultimate ground’ of economic reality is the design of God, the teleological order. Ceteris paribus: what is will

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ultimately be determined by this teleological imperative. Still, it can be the case that a conjunction of circumstances mitigates the ‘natural’ gravity of this teleology. In such a situation there will be an automatic adjustment process back towards the natural imperative without conscious human agency. In the language of WN there is a ‘natural’ price which might at any time differ from the market price, but over time, and without deliberate human intervention, the market price will gravitate to the natural price: ‘The natural price, therefore is, as it were, the central price, to which the prices of all commodities are continually gravitating’ (WN I.vii.15). What Veblen is alluding to is the principle of unintended consequences. Natural processes are subjected to theological ends in unconscious but divinely inspired processes. Veblen’s interpretation is a strong one and not necessarily to be endorsed. It is however illustrative of one tradition of reading Smith in a highly theological manner. Morrow (1984 [1927]) attests that the ground of Smith’s ethics and his economics is theological. The religious element tends toward a natural theology, but he is not constructing an ivory tower of metaphysics. In fact, Morrow ascribes to Smith the belief that social and economic institutions were actually the result of the power of God: The real foundation for Adam Smith’s faith in the ultimate harmony of conflicting interests of individuals is to be found in his theology . . . In accordance with this theology, Adam Smith looks upon social and economic institutions as the products of a power beyond human power, of a reason which human reason can fathom but cannot imitate. (Morrow 1984: 175–6) Morrow’s claim is clear: ‘Nature, spelt with a capital N, equals God’ (Morrow 1984: 176). Morrow interprets Smith as seeking to provide an account of human affairs that accepts a theological basis for the new developments in economic and social affairs of the time. Another seminal article is Viner’s ‘Adam Smith and laissez faire’ (1984 [1927]). Like Veblen, Viner identifies Smith’s predisposition to apply elements of philosophical theology to ethics and economics: In his Theory of Moral Sentiments, Smith develops his system of ethics on the basis of a doctrine of a harmonious order in nature guided by God, and in an incidental manner applies his general doctrine with strict consistency to the economic order. (Viner 1984: 145) For Viner, Smith’s major claim to originality is his application of ‘the unifying concept of a co-ordinated and mutually interdependent system of cause and effect relationships which philosophers and theologians had already applied to the world in general’ (Viner 1984: 143). Economic

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phenomena are manifestations of this set of relationships, this ‘underlying natural order’. In so doing he gave to economics a ‘bond of unity’ with the prevailing philosophical and theological thought. Viner paints an expansive picture of Smith’s theism. Nature is more than a Divine benediction. In Smith’s hands it becomes the very condition of the possibility of human sociality and the guarantee that such sociality will, in the main, be towards the good.7 This is how Viner reads Nature in TMS: In the Theory of Moral Sentiments, Smith develops the doctrine of a beneficent order in nature, manifesting itself through the operation of the forces of external nature and the innate propensities implanted in man by nature. The moral sentiments, self-interest, regulated by natural justice and tempered by sympathy or benevolence, operate in conjunction with the physical forces of Nature to achieve the beneficent purpose of Nature. Underlying the matter-of-fact phenomena of human and physical nature is benign Nature, a guiding providence, which is concerned that natural processes shall operate to produce the ‘happiness and perfection of the species’. (Viner 1984: 145)

0111 More recent authors continue to assert the theological underpinning of Smith’s naturalism.8 One significant writer is Young (1997), who suggests that the important difference between Hume and Smith is that the latter believed in a transcendent natural morality and the role of natural law:

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His [Smith’s] writing contains theological ideas and their associated concern for illuminating plans and purposes which are beyond the knowledge and intentions of individual human agents whose behaviour is under examination. . . . There is a strong sense of plan, purpose and teleology in Smith which is not found in Hume. . . . Thus we find frequent references to the Author of Nature, the Deity, Nature and so on. This is a reflection of the influence on Smith of the natural law tradition which goes all the way back to the ancient Greeks, and it is an indication that he accepted at least some of its precepts. (Young 1997: 15–16) Young emphasises the continuity between Smith and the tradition, though he notes the connection to the scholastics is indirect as Grotius, Pufendorf and Hutcheson do not transmit to Smith the depth of the scholastic perspective on natural law morality. Young, like the other authors, seems to be concerned about theological elements of Smith’s thought being linked too closely to his ethics and economics. Young believes that Smith’s theological ideas are to be restricted to the arena of final causality, whereas his naturalistic ethics and economics are set in terms of efficient causality.9

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The goal seems to be to inoculate his economics against any theological influenza. For Young the rejection of Smith’s theology would have no real collateral damage for economics, as long as what is ‘natural’ can be constrained to the realm of efficient causality. So Young believes that ‘nothing significant hinges’ on the nature of Smith’s theism.

III How does Smith deploy the category ‘Nature’? The account of ‘Nature’ in Smith presented here has similarities and differences with these accounts. The basic position taken is that Smith’s concept of ‘Nature’ is theologically inspired. ‘Nature’ is to be understood in certain contexts as an efficient cause, with the Divine will as the final cause: The wheels of the watch are all admirably adjusted to the end for which it was made, the pointing of the hour. . . . If they were endowed with a desire and intention to produce it, they could not do it better. Yet we never ascribe any such desire or intention to them, but to the watch-maker, and we know that they are put into motion by a spring, which intends the effect it produces as little as they do. But though, in accounting for the operations of bodies, we never fail to distinguish in this matter the efficient from the final cause, in accounting for those of the mind we are very apt to confound these two different things with one another. When by natural principles we are led to advance those ends, which a refined and enlightened reason would recommend to us, we are very apt to impute to that reason, as to their efficient cause, the sentiments and actions by which we advance those ends, and to imagine that to be the wisdom of man, which in reality is the wisdom of God. (TMS(1) II.ii.3.5)10 The fine balance of the natural order occurs without the explicit intention of the agents involved: ‘we never . . . imagine that the blood circulates, or the food digests of its own accord, and with a view or intention to the purposes of circulation or digestion’ (TMS(1) II.ii.3.5). Smith says we never ‘account’ for the digestion of food from its efficient causes because we require the final cause of a knowing will to produce them. The problem is made more difficult with human action because our capacity to act as a final cause for our actions confuses us into thinking our decisions are the only form of agency at stake. Smith thinks we can see the great ends of Nature, but we cannot engineer them. The claim here is far-reaching. The great ends of Nature are achieved by the final causality of the Divine will operating through aspects of our human nature, most notably our natural sentiments. Smith’s personification of Nature supports these theological presuppositions. It is not simply an ‘internal principle’ (Cropsey 1957: 2) or complex

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biological or sociological process. Rather Nature has favourite ends (TMS(1) II.i.5.10), she directs (TMS(1) II.i.5.10), she exhorts (TMS(1) II.ii.3.4), she orders (TMS(6) III.3.10), she establishes (TMS(6) III.3.21) and so on. Smith does not posit that Nature is some Demiurge between the Creator and creation. The personification is but a philosophical construction designed to evoke an underlining genius that grounds the natural process, a genius that is analogous to, but greatly exceeds human reason. That there can be no real personification of Nature is highlighted by the numerous references to the Divine acting through nature: ‘the Author of Nature’, ‘the Great Physician of Nature’, ‘Director of Nature’. The personification alludes to the Divine subjectivity for which Nature is a mere medium. A simple equation of ‘Nature’ with God seems overly simplistic. Smith uses Nature in different ways in different contexts. At times it has a strong theological meaning. At others this meaning is not emphasised, or not present at all. Still, the fundamental position is that Nature is the efficient means of a final cause which is the providential will of a loving God. The basic usages are presented in Table 1. There is the very strong claim by Morrow that Nature refers to God. Morrow reads the direct action of the Divine into most of the natural processes Smith describes. There is the weaker claim (Young is an example) that restricts any reference to the Divine to the realm of final causality. This analysis proposes a semantical innovation that might provide a more meaningful alternative to these polar positions. The suggestion is that we can understand the efficient causality as referring to the action of the Divine in either a strong sense (category 3 in Table 1) or a weak sense (category 4). The intuitive rationale for the distinction is that Smith at times wanted to make his theological presuppositions explicit (especially TMS). However, at other times this would have seemed a distraction. To have had a chapter in WN about natural theology would not really have fitted very well. The point is not that God works ‘less’ in some parts of the natural order than in others, but that in some cases the substantive theological ground can be inferred. So the strong theological sense of ‘Nature’ relates to an explicit religious usage but the weak sense relates to the case when a sense must be inferred. The efficient causality of providence is reflected through the natural sentiments. These sentiments are the vicegerents of God (TMS(1) III.5.6). They maintain order within human society and promulgate the laws of God. In these descriptions the stronger sense is seen clearly: these vicegerents of God mediate the Divine will. Smith uses the word ‘promulgate’:

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Since these [natural sentiments], therefore, were plainly intended to be the governing principles of human nature, the rules which they prescribe are to be regarded as the commands and laws of the Deity, promulgated by those vicegerents which he has thus set up within us. (TMS(1) III.5.6)

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Table 1 Four usages of Nature Definition

Examples

1 Ordinary adjectival usage (consistent with Hume’s characterisation)

Natural as being opposed to miracles, or the rare and unusual, or to human artifice.

Natural affection between parent and child (TMS(6) VI.ii.1.14)

2 Human nature

Primary and inalienable elements of constitution of the human subject usually described in terms of senses, sentiments and faculties (including reason). It is a product of the work of Nature understood in senses 3 (and possibly 4) below.

‘Human nature’ (TMS(6) III.2.33)

3 The efficient causality of providence (strong sense)

It is from these references that the Smithian conceptual system explodes. The benevolence of God is the final cause that is revealed and efficaciously mediated through the efficient cause of Nature. God uses Nature to hardwire the human subject with certain basic instincts that underwrite human existence and its inalienable sociality. Nature is an internal principle, but not the outworking of some Darwinian evolutionary process. This whole perspective is deeply implicated with loyalty to belief in a Divine plan/design for creation.

Nature exhorts us to acts of benevolence (TMS(1) II.ii.3.4)

4 The efficient causality of providence (weak sense)

The strong and weak nuances are differentiated with respect to the context in which they appear. There is no significant change in Smith’s views of nature as the efficient principle of the Divine will. Still, where the context is more removed from theological/ philosophical discussion it seems sensible to record this emphasis as a weaker sense of this efficient causality. The Divine ground is therefore implicit from the general philosophical foundations of Smith’s thought. The usage is generally adjectival. Most references to nature in WN are of this weak sense.

The natural price, natural progress of opulence (WN III.i)

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In this sense the natural sentiments are a vehicle for Divine revelation. An example of this is that we learn our relationship to God by our relationship with our parents (TMS(2) III.1.[3]). From our accountability to our parents we learn our accountability to God. This form of the revelation of God’s will is not written on tablets of stone, but in the complexities of human emotions. The efficient causality of providence provides for order and harmony. Smith emphasises the order and regulation in Nature. Nature is like ‘a grandiose machine’. In the case of the weaker sense of efficient causality of providence, the order is described in terms of economic processes like the price mechanism. The same efficient causality of providence is at stake, immanent in the social intercourse of human relations. However, this is the more mundane and usually more economic sphere. The point is not that the Divine action in grounding our lives is less present but that it is simply less observable. The same human nature is at stake, with its providential grounding, but the situation of life simply appears less directly related to this providential action. The weaker sense of ‘Nature’ is the immanent element of the divine in Smith’s natural theology. However, in Smith’s view ‘Nature’s’ efficient causality is still finely tuned to divine final ends.

IV ‘Nature’ and the natural sentiments

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This processes of efficient causality that relate to these divine final ends are the processes of human interpersonal commerce. They are embedded in Smith’s system in the way that human beings think and interact. These ‘natural’ sentiments are fundamental aspects of Smith’s anthropology which make it possible for human beings to interact for mutual and social benefit. The next sections outline how the key sentiments of sympathy, self-love and conscience interact providentially. IV.A Sympathy

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Smith believed that God (via Nature) endows us with a capacity to reproduce in our imaginations reasonable copies of the sentiments that others feel. It is the primary psychological element of Smith’s account of the moral human being. It grounds our sense of self, our familial relationships, our capacity for participation in broader society including commerce, our ethics and ultimately even our spirituality. Sympathy is not an emotional response. It is an exercise of the imagination. It produces a proximate conception, although still a mental construction, of what others feel. It is an ‘imaginary change of situation’ whereby we put ourselves in another’s place, albeit in a limited fashion (TMS(1) I.i.4.7).11 It is not the result of a process of reflection, the idea presents itself. It is an innate, semi-mechanical and almost

134 Brendan Long autonomic response, in the words of Viner ‘subrational’ (Viner 1972: 79). Smith illustrates the principle by reference to the extreme case when ‘our brother is upon the rack’: It is the impressions of our sense only, not those of his, which our imaginations copy. By the imagination we place ourselves in his situation, we conceive ourselves enduring all the same torments, we enter as it were into his body, and become in some measure the same person with him, and thence form some idea of his sensations, and even feel something which, though weaker in degree, is not altogether unlike them. (TMS(1) I.i.1.2) From this imaginative change of place we are in the best position to form a judgment of the person’s conduct. If we can sympathise with the subject’s motivations, given its situation, if we deem its intentions and actions proper, then we give its conduct our moral approbation: ‘When the original passions of the person principally concerned are in perfect concord with the sympathetic emotions of the spectator, they necessarily appear to this last just and proper, and suitable to their objects . . .’ (TMS(1) I.i.3.1). This first case is simple sympathy. The more complex situation is where we combine this with our sympathy for a person affected by this agent. This is the sense of ‘merit’. A benevolent action is not only just but meritorious. We sympathise not just with the motive of the agent, but with the gratitude (in the case of positive action) felt by the persons affected. In the negative case of unjust behaviour, say theft, our sympathy is withdrawn from the thief not just because we cannot identify with his motives, but because also we sympathise with the emotions felt by the victim of his crimes: As our sense, therefore, of the propriety of conduct arises from what I shall call a direct sympathy with the affections and motives of the person who acts, so our sense of its merit arises from what I shall call an indirect sympathy with the gratitude of the person who is, if I may say so, acted upon. (TMS II.i.5.1) Judgments of self are reflected sympathy when we imagine whether a spectator would ascribe propriety and/or merit to our actions and situation. This self-analysis on the basis of the perception of others makes society a moral mirror for the agent. Here we see the distance between Smith and a selfish egoism. Sympathy breaks open the individual’s sense of virtue, honour and justice to what is determined by what others could reasonably be expected to feel. Although sympathy is not necessarily altruistic it is always other-focused and directed, never solipsistic or selfish.

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IV.B Benevolence The relationship between benevolence and self-love underpins Smith’s whole system.12 He uses benevolence or beneficence synonymously (TMS(6) VI.ii.1.19). A disposition of universal benevolence that ‘thinks much of others and little for ourselves’ is still the crowning edifice of human conduct (TMS(1) I.i.5.5). In Smith the connection between benevolence and this Christian virtue is explicit. Benevolence is not just a sort of feeling that flows from sympathy, it is the practical exercise of Christianity’s Golden Rule. Smith makes this connection explicitly. Virtue is for Smith the Christian option for the love of the other as much as we love ourselves. Smith says:

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that to feel much for others and little for ourselves, that to restrain our selfish, and to indulge our benevolent affections, constitutes the perfection of human nature; and can alone produce among mankind that harmony of sentiments and passions in which consists their whole grace and propriety. As to love our neighbour as we love ourselves is the great law of Christianity, so it is the great precept of nature to love ourselves only as we love our neighbour, or what comes to the same thing, as our neighbour is capable of loving us. (TMS(1) I.i.5.5) Smith was not satisfied with an account of human ethical behaviour that made virtue consist solely, or even primarily, in benevolence. Smith’s belief in universal benevolence creates a problem for his empiricism. He ascribes favourite ends to Nature:

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the favourite ends of nature . . . self-preservation, and the propagation of the species, are the great ends which Nature seems to have proposed in the formation of all animals. Mankind are endowed with a desire of those ends, and an aversion to the contrary . . . (TMS(1) II.i.5.10) To Smith’s empirical mind, if benevolence was the prime agent of efficient causality of providence through the natural sentiments it would have to be experienced as such. The problem is that it is so rare. It is just a feeble spark that is not altogether reliable even in the virtuous.

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It is not . . . that feeble spark of benevolence which Nature . . . that is thus capable of counteracting the strongest impulses of self-love . . . It is reason, principle, conscience, the inhabitant of the breast, the man within, the great judge and arbiter of our conduct. (TMS(2) III.3.4)

136 Brendan Long The scarcity of altruism means it cannot be the prime agent. It may constitute perfection, but it cannot be the basic constituent of the moral infrastructure of human society. IV.C Virtuous self-love In place of altruism Smith develops the concept of virtuous self-love as the basic ethical building block of human civilization. He wants to explain moral behaviour in terms of something that both seems to accord with our everyday experience, and also fits into his theological pre-conceptions. The formidable influence that elements of his thought now enjoy is testimony to the foresight of his choice of a positive sense of self-love as the hinge concept. How persuasive is his simple observation that it is unrealistic to expect that the brewer, the baker and butcher will give us our dinner purely from their altruism. How natural it seems to suggest that their self-love is something basically good, certainly not devoid of any sense of virtue: ‘It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love . . .’ (WN I.ii.2).13 A positive reading of self-love was radical enough when Smith wrote. So well have we been indoctrinated with the often crass maxims of contemporary psychology (good self-esteem, love yourself, and so on) that a notion of love of self that is divorced from vice seems quite natural to us. At the advent of the modern period the situation would have been quite different. Mandeville created quite a stir, in his Fable of the Bees [1714/29], where he suggested that private vice could be beneficial for society. Smith rejects this system as licentious and says that it wholly confuses virtue with vice (TMS(6) VII.ii.4.6). Those who read Smith as suggesting that selfinterest always serves the common good mistake him for Mandeville. To suggest that a love of self could be virtuous is to present an optimistic, positive anthropology. In the conservative Calvinist bastion of Edinburgh or Glasgow the popular theology was that the human being was seen as irreparably marred by the sin of Adam, incapable of good, wholly lost and evil without the grace of Christ.14 Smith will not accept that we are by nature without virtue. Rather, he claims that we are naturally made for virtue, not marred and broken vases, but awesomely sophisticated machines that embody the design of the greater engineer of Nature. The philosophical/theological basis for a positive sense of self-love is both Stoic and Christian. Certainly Smith’s intention was to develop an account that would be acceptable within the Christian world he lived in by borrowing some limited insights from the Stoics. Unfortunately, although most accounts of Smith’s sense of self-love turn to TMS they rarely appreciate the theological basis for his position. Self-love for Smith is a good of God’s creation, a providence as wholesome as flowers in the

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garden. It is implicated in those most fundamental human sentiments associated with drive for our advancement as individuals and in society. If these are the Divinely willed final causes then the associated efficient causality is equally benign. One key element of this causality is the Stoic concept of ‘oikeiosis’ (οικειοσις). This is the Stoic understanding of the principle of survival in animals which also applies to humans.15 Smith does not refer to this by name, but does often refer to self-preservation of the individual as one of the favourite ends of Nature. Self-love underwrites the basic actions of our life: nutrition, shelter, defence and security: ‘Every man is, no doubt, by nature, first and principally recommended to his own care . . . it is fit and right that it should be so’ (TMS(1) II.ii.2.1). At this level self-love is natural and praiseworthy. The lack of it would not, under normal circumstances, enjoy the approbation of society. Properly constrained self-love can even be seen as being commanded by the Deity. As God is revealed in natural sentiments, a certain sense of self-love must be part of the content of this revelation in creation. Smith’s argument is also based on Christian warrants albeit those interpreted from his own perspective. Smith’s argument here is a clever rebuttal of the theological doctrine that restricts morality to a complete obedience to the commands of the Deity. Such dogmatism annoys Smith’s pragmatic and empirical disposition. His sarcasm is cutting: We ought neither, they [the Divine command theorists] said, to reward from gratitude, nor punish from resentment; we ought neither to protect the helplessness of our children, nor afford support to the infirmities of our parents, from natural affection . . . We ought not to be grateful from gratitude, we ought not to be charitable from humanity . . . nor generous and just from the love of mankind. (TMS(1) III.6.1)

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To think that all virtue is simply a mindless obedience to the will of God is for Smith to deny the Divine gift of the natural sentiments. He seems to be saying that what would have been the point of God creating us with natural sentiments if they themselves were not guides to human behaviour. It is not that he denies the duty to obey God’s will. To the contrary, he suggests that common sense, philosophy and Christian revelation direct that it should be the ruling if not the sole principle of our conduct: ‘That the sense of duty should be the sole principle of our conduct, is no where the precept of Christianity; but that it should be the ruling and governing one, as philosophy, and as, indeed, common sense directs’ (TMS(1) III.6.1). Rather if God is revealed in these natural sentiments, which providentially provide for harmonious social life, they should be followed for their own sakes. We are commanded to love God and love our neighbour as we love ourselves. Far from being mutually exclusive, the love of self

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and benevolence are inextricably linked in the very words of Christ. Smith says ‘we love ourselves surely for our own sakes, and not merely because we are commanded to do so’ (TMS(1) III.6.1). In the force of passion self-love provides the basis, the benchmark from which to aspire to the perfection of a pure benevolence. If it is such how can it not be in itself inherently good. The natural sentiment of self-love is therefore implicitly validated, at least as a partial virtue, by the Golden Rule of Christianity. So for Smith this most basic of human passions (virtuous self-love) is understood as moving the orbit of this most central of Christian ethical principles. The specific role of sympathy here is worth emphasising. It provides the psychological mechanism by which we can do what the Golden Rule recommends: to do unto others as we would have them do unto us. It provides us with the capacity to imaginatively ‘feel’ what others feel. Only then can we restrict our conduct and our self-love to what others approve of. Sympathy is the method of choice that Smith adopts to ground his Christian ethical system on the Golden Rule through an expansive role for virtuous self-love. IV.D Vicious self-love This innocent state of self-love is stylised and hypothetical. In practice, Smith’s presentation of self-love is also implicated with negative moments of human subjectivity. The strength of our self-love is such that it tends to distort comparisons between our interests and those of others. Smith’s negative sense of self-love is developed using analogies of distance, size and vision. In much of the corpus, Smith seeks to transfer concepts from science into his ethics. There is an inevitable natural partiality to self akin to the partiality implicit in our seeing. As he writes from his Glaswegian home, he sees a landscape of woods and distant mountains which: seems to do no more than cover the little window I write by, and to be out of all proportion less than the chamber in which I am sitting . . . In the same manner, to the selfish and original passions of human nature, the loss or gain of a very small interest of our own, appears to be of vastly more importance, excites a much more passionate joy or sorrow . . . than the greatest concern of another with whom we have no particular connexion. (TMS(2) III.3.2–3) Oikeiosis tends towards its own excess, and makes vice of its own virtue. It is inevitable for Smith that our natural sentiments will tend to overvalue our own interests relative to than those of others. At this level of reflection we are so biased towards ourselves that we would be more worried about hurting our fingers than the death of a thousand in China (TMS(2)

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III.3.4). Things close to us, and we ourselves, appear greater in proportion, out of proportion to what is real, and the more distinct things are from us the less significant they appear to matter. It is ‘natural misrepresentations of self-love’: an irregularity in our sentiments (TMS(2) III.3.4): ‘This selfdeceit, this fatal weakness of mankind, is the source of half the disorders of human life’ (TMS(1) III.4.6). There is a ‘mysterious veil of self-delusion, which covers from his view the deformities of his own conduct’ (TMS(1) III.4.4). This sense of self-love is absurd and distorted. What is needed is distance. IV.E The real spectator

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The natural irregularity of excessive self-love is in the first instance checked by society. It least in TMS(1), Smith had an extremely optimistic view of the reflective benefit of society. It is a mirror that helps an individual see itself more truly without the natural delusions of self-love. This is a strong reading of the necessity of human interdependence. Without the influence of society we would never really learn morality (TMS(1) III.1.3): Were it possible that a human creature could grow up to manhood in some solitary place, without any communication with his own species, he could no more think of his own character, of the propriety or demerit of his own sentiments and conduct, of the beauty or deformity of his own mind, than of the beauty or deformity of his own face. (TMS(1) III.1.3) Other persons in society form what Smith calls the real spectator. God has made us via Nature to desire to be the object of praise by the real spectator. This is not pure vanity as the love of praise can be the love of virtue. It leads us in a partial way to avoid the disapprobation of the spectator and seek what others would approve, or deem just. In Smith’s world, a person without any influence of the real spectator (one never born into society) cannot even escape self-delusion and will inevitably fall into a sort of solipsistic insanity. It is so ironic that the prophet of contemporary economics, which usually demands independence of personal preference mappings,16 himself considered such independence the sure and certain road to moral absurdity. The desire to be beloved of the real spectator creates a measure of objectivity, of moral distancing from self, that restores some equilibrium between the perception of personal interests and those of others.17 Natural sentiments themselves tend to correct their own irregularities. Here is the Smithian semi-Stoic extraction of good from what appears evil. The natural sentiments are themselves an efficient cause of a Divinely willed final cause: a happy human society. The Divinely pre-programmed defect can only be corrected in human fellowship.

140 Brendan Long So when does self-love slip over the edge from virtue into vice? Smith always seeks to maintain generality in ethical matters to avoid the pitfalls of the casuistry he despised. There is then no clear dividing line, no single rule. Smith is more concerned with rendering an account of ethical processes rather than concrete outcomes. It is the process of the spectator that will adjudge, in the first instance, whether the self-love is excessive or proper and thus virtuous. This highlights the role of sympathy. If the spectator (and we ourselves as spectators of others) can sympathise with an action it will be approved of. We can see how this serves his position on self-love. Self-command is required to restrain our self-love to keep time with the sentiments of others. There is nothing wrong with self advancement as long as it is judged by the spectator as being worthy, if it is capable of enjoying a positive sympathetic response. Through sympathy we become the vicegerents of each other and ‘superintendent of each other’s conduct’. In this process we actually imitate God: The . . . Author of Nature . . . has made man, if I may say so, the immediate judge of mankind; and has, in this respect, as in many others, created him after his own image, and appointed him his vicegerent upon earth, to superintend the behaviour of his brethren. (TMS(6) III.2.31) Smith’s God is not just the great architect but is also the great judge of hearts. When Smith states that we are created in the image of God, the imitation is primarily emphasised with respect to this judicial function. To the extent that we bear the Imago Dei we are in some way judicial vicegerents of the Divine: lesser magistrates in the juridical hierarchy. IV.F The impartial spectator This imitation and judgment is enhanced through the use of a higher tribunal: that of our own consciences. Smith was aware of the fallibility of the real spectator. The ‘spectator without’ works from the appearances not from motivations, from the event rather than the design. Its operative principle is the desire for praise.18 But a higher tribunal would work from the premises of real virtue, what is praiseworthy, from the motivations behind an act rather than from merely the validation of society. This is the jurisdiction of the ‘ideal’, the ‘supposed’, the ‘impartial’ spectator, the person ‘within’, the ‘demi-God within the breast’. When we speak of conscience we generally refer to a process of self-reflection. Still, we do speak of a social conscience as a critical capacity to comment on matters of public policy. The supposed impartial spectator seems to contain elements of both concepts. It involves not only the means by which we control our conduct, but the mechanism by which we assess the conduct of others under the same criteria.

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Again sympathy is the operative mechanism. The imagination permits a reasonable appreciation of the perspective from another’s vantage point. This produces an appropriate proportionality between each other’s relative interests. We can adjudge their conduct by imagining what a third party would feel if they were exposed to the situation. We assess ourselves by the same standards providing impartiality. Sympathy is shared and the impartial spectator’s judgments are generally known to all. Such judgments naturally tend to the creation of general rules of conduct, as distinct from a precise and artificial casuistry. Over time it is natural that these general rules will tend to enter the legislative arena and provide the constituents of a system of commutative justice. When the impartial spectator is acting properly, in accord with fundamental natural sentiments, and where necessary overcoming irregularities in them, the resulting general rules can be understood as commands of God: This reverence is still further enhanced by an opinion which is first impressed by nature, and afterwards confirmed by reasoning and philosophy, that those important rules of morality are the commands and laws of the Deity, who will finally reward the obedient, and punish the transgressors of their duty. (TMS(1) III.5.3) The notion of the impartial spectator has been constructed from theological components. It is an application of Smith’s understanding of the Golden Rule. Smith’s version of the Golden Rule is that we love others as we love ourselves, and in Smith’s eyes this is to the extent to which they are capable of loving us. The impartial spectator imagines itself in the situation of another and therefore acts with regard to others as it would have them act with regard to itself. How is it that the extent to which our neighbour can love us is the same as the extent to which we can love ourselves? It is not, as Cropsey crassly suggests, a restriction of the Golden Rule to the basic threshold required by commutative justice (Cropsey 1957: 19). Rather Smith claims that the spectator must be able to enter into our conduct through sympathy for it to be given moral approbation. The extent to which our neighbour can love us is the extent to which the ideal spectator can sympathise with our conduct. Without this his system dissolves into a personal moral relativism that is totally unSmithian. So it is not surprising that he makes the reference at this crucial point of his whole moral system. All of us are capable of loving each other in a manner that the impartial spectator endorses. Here a real tension emerges in Smith’s concept. When acting perfectly the spectator appears to be completely benevolent, to be totally altruistic. The operative mechanism appears to be more than a virtuous self-love, but a genuine altruism. In the final analysis has Smith switched back to an altruistic model? A possible answer may lie in the specific reading of the impartial spectator as conscience. For Smith the subject needs to somehow

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distance itself from its own interests to constrain excessive self-love. By obeying the dictates of the real spectator we are forced to put aside aspects of our own interest that the spectator cannot sympathise with. With respect to the operation of conscience the distance is internalised to the subject, creating an artificial barrier in order to create objectivity: When I endeavour to examine my own conduct, when I endeavour to pass sentence upon it, and either to approve or condemn it, it is evident that, in all such cases, I divide myself, as it were, into two persons; and that I, the examiner and judge, represent a different character from that other I, the person whose conduct is examined into and judged of. The first is the spectator . . . the second . . . is . . . the person whom I properly call myself. (TMS(2) III.1.6) Smith develops an explicitly theological basis for conscience. When his conscience operates from the principle of praiseworthiness ‘he seems to act suitably to his divine extraction’ and when operating from the love of praise, his human extraction (TMS(6) III.2.32). Smith’s good and virtuous person develops so that he/she in effect becomes completely the impartial spectator. Virtue consists in the perfect practice of conscience. The more one becomes the ideal spectator, the more one comports oneself according to our naturally Divine extraction: this is Smith’s path to holiness. The bivalent poles of operation for conscience correspond to Smith’s two central ethical categories: virtuous self-love and benevolence. When conscience is operating from love of praise and its human extraction, it is simply following its virtuous self-love. When it follows the love of praiseworthiness and it is the Divine extraction, it is following benevolence and human perfection. The ideal spectator is perfectly benevolent. However, this second tribunal of the impartial spectator is also not infallible. Our conception of the impartial spectator can still be distorted by factionalism and religious enthusiasm and even the social situation it finds itself in. The hope of those affected by such a situation is the last tribunal, the great judge of hearts after death (as Smith described with reference to the Calas incident).19 Only through the judgments of the impartial spectator can we ultimately discern how to love others as we can love ourselves. This impartial arbiter tells us when to stop loving ourselves, that this self-love tends to exceed what others find reasonable. So through the mechanism of the impartial spectator, Smith makes the fulfilment of the Golden Rule not only possible but essential in a society.

V The social aspect of Smith’s natural theology The principle of moral distance is important to Smith. The closest extreme is ourselves and our own interests, those furthermost from us are persons

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with which we can have no direct concern at all. Smith’s analogy of looking out the window, quoted previously, illustrates the principle. Everything close to us appears bigger than everything outside, it is out of strict proportioning in our sight. Applying this to ethics, our own interests are exaggerated in our eyes, those furthest from us shrunk. As a general rule altruistic benevolence also dissipates as we are dealing with persons increasingly distant from ourselves. Therefore, it cannot be relied upon to compensate for or overcome this proximity distortion of self-love. Still, Smith cannot accept this is a final state of affairs as it contradicts his theological ideas of the wondrous unity and harmony of nature and efficiency of the Divine design for mutual social happiness. How is the irregularity of our natural sentiments to be overcome? Society itself is the cure, with the real spectator and the impartial spectator/conscience to bring some balance to the distortion. From the maxims of these spectators general rules are formed which make the principle and laws of commutative justice. They compensate for deficient benevolence by threat of sanction. In the complexities of commerce some practical general rules are needed as the surrogate form and symbol of the practical presence of the impartial spectator. The pragmatic element of the system is that it reduces the moral threshold from benevolence, which is perfection, to a sort of lowest common denominator of justice: doing no harm. For the most part justice requires doing nothing as far as the decent individual is concerned. Some, like Cropsey, interpret this as a carte blanche to maximise self-interest within the constraints of commutative justice (Cropsey 1957: 19f.). Smith is not advocating this at all. Rather he is just providing the basic threshold for society to function as the harmonious and beneficial work of Divine providence. Smith would of course, like his predecessor Hutcheson, prefer universal benevolence in business, politics and all social areas. This is the ornament that gives beauty to the edifice, though sadly in practice it is too rare to be its foundational structure. Young seeks to synthesise Smith’s account by using what he calls the malevolent and benevolent models (Young 1997: 58f.). The benevolent model captures the tendency for great benevolence with regard to persons closer to us. The malevolent model is the exploitative element in human nature. A better sense of the malevolent might be allowing the delusions of self-love to be given free reign. The principles of commutative justice, especially in matters of property and commerce, act as a partial proxy for the benevolence that would be expected toward a person’s more intimate society. So through the general rules of commutative justice, benevolence towards family and friends is extended to all society via restrained self-love. If these general rules are authentic expressions of the real and impartial spectators’ judgments, then we can say that the basic social and commercial structures of a society are based on virtuous selflove, and are thus fundamentally good. To upset this positive appreciation and arrive at a malevolent interpretation requires only that real and

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impartial spectators are dysfunctional, or that the legal and institutional fabric of a nation is so constrained that the spectators’ judgments are not properly transferred into general laws of society. Although the means of this socialisation of benevolence are providential, they require the co-operation of human freedom. Smith does not give us a theodicy, but he does attribute to Divine providence the irregularities in human sentiments. Sometimes these irregularities have their own redeeming features like the need to judge from events rather than design (making bad intentions as culpable in law as bad actions is impractical juridically, TMS(1) II.iii.3.2). Still, the crucial element of these irregularities is that they provide scope for human freedom to make of the world a place of virtue or vice. The irregularity of excessive oikeiosis is the key factor. Human moral freedom is about restraining self-love to recognise others’ needs. For the individual there is no theological determinism, no pre-destination of Smith’s providence through the efficient causality of nature. Though the necessary conditions of a mutually beneficial society are a matter of the grace of creation, the sufficient condition is the restraint of self-love and ideally, the application of the Golden Rule of Christian morality. However, at the level of society, Smith’s providentialist vision is deterministically positive.

VI Synthesis and conclusions The essence of Smith’s natural theology can be stated in the following terms. The final cause of God’s creative action is a desire to produce a society of virtuous and happy persons. The efficient causality is Nature, which is really human nature. Our natural sentiments are so artfully constructed by the Divine architect that their combination in society is mutually correcting and enhancing, encouraging virtue, discouraging vice, and leading to reasonably just social and legal structures. An original desire for self-preservation (a Stoic notion) is developed to create a legitimate role for self-advancement and self-love. However, this is almost always excessively strong and our perceptions of the adverse judgments of others ensure that we constrain it. In this way we act as vicegerents of God’s Divine authority in superintending each other’s conduct. This spectatorial function is highly imperfect, so often we must rely on what our consciences tells us is worthy of praise. Potentially, we become an ideal spectator of our conduct in imitation of God, the paradigmatically impartial spectator. However, even when we fail in this task the plan of the great superintendent is so ingenious that good will often eventuate. The social interaction of human sentiments seems to have some synergetic countervailing force that mitigates the impact of human imperfection. In the end, it is an extremely optimistic coherence theory of human nature. Smith’s ethical thought is an application of this natural theology. Nature as the efficient causality of providence operates to produce harmony in

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the natural sentiments via sympathy. This is the capacity to reproduce in our imaginations reasonable copies of the sentiments that others feel. Sympathy is an innate, semi-mechanical, pre-rational response. Simple sympathy occurs when we observe the sentiments of others as according with what we might judge proper in a situation (a judgment of ‘propriety’). A double sympathy or merit arises when we combine this with sympathy for a person affected by this agent. Judgments of self are reflected sympathy when we imagine whether a spectator would ascribe propriety and/or merit to our actions and situation. Sympathy makes it possible for us to be real spectators of each other’s actions as thus the vicegerents of God. We moderate each other’s excessive self-love to a more acceptable pitch. The collective judgments of society are general rules, which ultimately form the laws of commutative justice. To the extent that the general maxims of the spectator reflect the natural sentiments in their proper balance, they represent the commands of God. However, as Smith revised TMS he emphasised the possibility for perverse verdicts from this tribunal of public opinion. So he formed the construct of an ideal spectator from which we appeal any decision of the real spectator. This is essentially conscience. Smith summarises the system in the Golden Rule of Christianity. The ultimate standard for moral conduct is love of God, and love of neighbour/benevolence. However, love of self is vindicated as a lesser virtue if it is kept at the level at which our ‘neighbour can love us’, that is, to the extent to which society or the ideal spectator can sympathise with our actions (TMS(1) I.i.5.5). As we move further away from the intimate society of friends and family, benevolence does not occur and constrained self-love becomes the operative principle of society. The general rules of morality derived from our natural sentiments and the action of the spectator preserve some of the benefits of benevolence. The implication of this analysis is that an exclusively secular reading of Smith fails to capture the deeper movement of the Smithian corpus, which is theologically inspired. This is not to say that Smith’s system leans on a theological crutch. Rather, it simply seeks to show that a Christian anthropology and an economic anthropology can coincide.

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1 Long (2004) makes the argument for Smith’s theism per se. This is presumed in this analysis. The Golden Rule is the biblical principle that we are to love each other as we love ourselves. 2 It also appears that Smith’s academic interests lay outside of theology proper and more in philosophical theology. There are not too many theology books in his library (Rae 1965: 328). 3 TMS plus a bracketed number refers to the edition of TMS. 4 In subsequent references the Divine agent is Christian, and the gap in the imagination that reference to God is thought to explain is associated with the preservation of order and harmony (Long 2004).

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5 The first significant work on the invisible hand of Jupiter is by Macfie (1971: 595f.) 6 Examples of other authors who take a materialist reading of Nature are Pack (1995), Cropsey (1957) and Minowitz (1993). 7 Viner’s reading of Smith needs to be seen in terms of his other seminal work, The Role of Providence in the Social Order (1972), where he identifies a longstanding and consistent Christian interpretation of providence underwriting the action of commerce (Libanius under the influence of the Stoics, St Basil, St John Chrysostum and Thomas Aquinas). 8 In addition to Young (1997) see Davis (1990). 9 This more balanced position can be contrasted with the extremism of Myers, who suggests that Smith largely uses efficient causes as he believes these to be the ‘true’ causes (1983: 104). 10 There seems little doubt that Smith has the classical four ‘causes’ in mind in this section. 11 It should be noted that sympathy includes the possibility of some emotions being ‘transfused’ from one to another as in the case of joy and grief. However, this more empathetic situation is not the universal rule, and Smith does not focus on it. It is sufficient only to note that sympathy and empathy are not mutually exclusive. 12 Economists generally see Smith as advocating self-interest rather than self-love. In fact, his rich notion of self-love is often reduced to self-interest. Smith does not provide a clear distinction between the terms. We rely on the brewer’s and baker’s self-love for our dinner, but we also rely on them to follow their own interests. Self-love is clearly the higher notion as it seeks to open a conversation with the very heart of the ethical tradition. Self-interest appears to be a lower notion, a more concrete application to a specific situation of choice before a person. It operates similarly to self-love, but does not involve the interesting metaphysical and systemic ethical allusions of the wider notion. However, it is crucial to note that Smithian self-interest is not egoism. It needs to be seen as a subsidiary notion to self-love. It is not a single univocal moral position, but like self-love can be virtue or vice. Self-interest also needs to be constrained by self-command to be consistent with virtue. For example, self-interested investment decisions can be a form of virtuous self-love. However, if these decisions involve deception or fraud they would fall under the heading of vicious selflove. Smithian self-love and self-interest relate to the operation of sympathy, the spectator and conscience. So when Smith refers to self-interest it is a much wider notion than ethical or psychological egoism. 13 Notwithstanding the reference to ‘interest’ as well as self-love, we cannot interpret these tradesmen (and thus the real common bulk of the nation) as being egoists. Here WN must be read with TMS. The virtuous self-love of the average person is always constrained by self-command, rather than ‘humanity’, which means benevolence. Self-love that is not so constrained is utterly rejected by Smith. 14 The Westminster Confession included the statement that human nature is ‘disabled and made opposite to all Good, and wholly inclined to all Evil’. 15 It was an influence on Augustine’s approach to self-love as well as Smith’s (see O’Donovan 1980). 16 Preference mapping is a technical economic term. It conveys at a given level of utility the relationship that expresses those combinations of two goods with regard to which a consumer will be indifferent (two apples and pear is of equal utility say to a pear and two apples). In standard microeconomic theory our

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individual preference mappings are usually considered to be independent of other persons’ preference mappings. 17 The task here is to explain the theological character of Smith’s system rather than to enter into a detailed critique of it at every juncture (as many others have done). Still, it could be noted that two self-delusions do not necessarily provide perspective. If my deluded self-love is set alongside the deluded self-love of the other, perhaps the agent might just end up doubly deceived. 18 There is some evidence that Smith’s concept of spectator evolved over time. He became increasingly aware of inadequacies with the real spectator and placed greater emphasis on the impartial spectator (Raphael 1975: 87; and the early draft of TMS(2) included in the letter from Smith to Gilbert Elliot, 10 October 1759, in Smith’s Correspondence (1987) Letter 40). 19 It is not surprising that this incident impressed itself on Smith’s memory. A Calvinist converted to Catholicism, according to Smith simply to join the Bar, but then reportedly committed suicide in a fit of remorse. His father was convicted of his murder and broken and burnt upon the wheel at Toulouse 2 years before Smith arrived. This cause célèbre was championed by Voltaire. Whatever the real facts of the case (and Smith wrote the text 34 years after the events) it obviously excited Smith’s anti-Catholicism. However, it does stand as a testimony of his theism. He derides ‘that humble philosophy which confines its views to this life’ and asserts that ultimately the only reliable judge holds court beyond the confines of this world (TMS(6) III.2.12). He wrote this just a few months before his death. Those who want to make the man an atheist should read the biographical footnotes to his works.

Bibliography

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Cropsey, J. (1957) Polity and Economy: An Interpretation of the Principles of Adam Smith, The Hague: Martinus Nijhoff. Davis, J.R. (1990) ‘Adam Smith on the providentialist reconciliation of individual and social interest: is man led by an invisible hand or misled by a sleight of hand?’, History of Political Economy, 22: 341–52. Griswold, C.L. (1999) Adam Smith and the Virtues of Enlightenment, Cambridge: Cambridge University Press. Hume, D. (1992) A Treatise of Human Nature, Buffalo, NY: Prometheus. Long, B. (2004) Adam Smith and Adam’s Sin, Doctoral dissertation from the University of Cambridge. Macfie, A.L. (1971) ‘The invisible hand of Jupiter’, Journal of the History of Ideas, 32: 595–99. Mandeville, B. (1924) [1714/29] The Fable of the Bees: or, Private Vices, Publick Benefits, F.B. Kaye (ed.), Oxford: Clarendon Press. Minowitz P., (1993) Profits, Priests and Princes: Adam Smith’s Emancipation of Economics from Politics and Religion, Stanford, CA: Stanford University Press. Morrow, G.R. (1984) ‘Adam Smith: moralist and philosopher’, in Adam Smith: Critical Assessments, J.C. Wood (ed.), 1: 168–81, Beckenham: Croom Helm; reprint of Journal of Political Economy (1927) 35: 321–42. Myers, M. (1983) The Soul of Modern Economic Man: Ideas of Self-interest Thomas Hobbe to Adam Smith, Chicago: University of Chicago Press. O’Donovan, O. (1980) The Problem of Self-Love in St. Augustine, New Haven, CT: Yale University Press.

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Pack, S.J. (1995) ‘Adam Smith’s unnaturally natural (yet naturally unnatural) use of the word “Natural”’, in The Classical Tradition in Economic Thought: Perspectives on the History of Economic Thought, I.H. Rima (ed.), Aldershot: Edward Elgar. Rae, J. (1965) Life of Adam Smith, Clifton, NJ: Augustus M. Kelley. Raphael, D.D. (1975) ‘The impartial spectator’, in Essays on Adam Smith, A.S. Skinner and T. Wilson (eds), Oxford: Clarendon. Smith, A. (1976a) The Theory of Moral Sentiments, D.D. Raphael and A.L. Macfie (eds), Oxford: Clarendon Press. –––– (1976b) An Inquiry into the Nature and Causes of the Wealth of Nations, R.H. Campbell and A.S. Skinner (eds), Oxford: Clarendon Press. –––– (1980) Essays on Philosophical Subjects, W.P.D. Wightman (ed.), Oxford: Clarendon Press. –––– (1987) Correspondence of Adam Smith, E.C. Mossner and I.S. Ross (eds), Oxford: Clarendon Press. Veblen, T. (1899) ‘The preconceptions of economic science II’, Quarterly Journal of Economics 13: 396–426. Viner, J. (1972) The Role of Providence in the Social Order: An Essay in Intellectual History, Philadelphia, PA: American Philosophical Society. –––– (1984) ‘Adam Smith and laissez faire’, in Adam Smith: Critical Assessments, J.C. Wood (ed.), 1: 143–67, Beckenham: Croom Helm; reprint of Journal of Political Economy (1927) 35: 198–232. Young, J.T. (1997) Economics as a Moral Science: The Political Economy of Adam Smith, Cheltenham: Edward Elgar.

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Perspectives on recent developments in Adam Smith scholarship

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The solution is in the text A survey of the recent literary turn in Adam Smith studies Catherine Labio

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Who would have guessed in 1976 that Oxford University Press would soon entrust a Jane Austen scholar with a new edition of Wealth of Nations (WN) (Smith 1998 [1993])? The two hundredth anniversary of Adam Smith’s magnum opus did, it is true, trigger a significant rise in the number of studies devoted to this and other works of the eighteenth-century philosopher, a phenomenon that spread across a wide variety of disciplines, including literary studies.1 What no one could have anticipated, however, is the extent to which a growing number of social scientists would come to depend on the tools and language of literary analysis, from rhetoric to ‘theory’, in their research on Smith. Or the eagerness with which literary scholars would rediscover – one might even say embrace – Smith’s economic writings, a not insignificant departure for the practitioners of a discipline that has traditionally shunned all but Marxist forms of economic criticism. The literary turn in question in this essay is therefore double: it refers to the willingness of scholars working outside the field of literature to rely on literary methodologies and to literary scholars’ interest in the entirety of Smith’s oeuvre, WN included. This literary turn must be understood within the context of the wider dialogue that has been taking place between literature and economics in the last quarter of a century. A detailed survey of this multifaceted phenomenon would exceed the scope of the present contribution.2 Four distinct yet related threads are nevertheless worth introducing here. First, in the late 1970s, the groundbreaking works of literary critics Shell (1978) and Heinzelman (1980) modelled some of the ways in which semiotics could be brought to bear on the study of economics. Second, during the same period, a number of historians of economic thought began to adopt some of the critical theories that were being widely disseminated by literary scholars.3 Third, McCloskey’s Rhetoric of Economics (1985) launched an increasingly sophisticated dialogue between economists and literary scholars regarding the rhetorical and literary dimensions of economic The Adam Smith Review, 2: 151–178 © 2006 The International Adam Smith Society, ISSN 1743–5285, ISBN 13: 978–0–415–39460–4

152 Catherine Labio writings and the economy.4 Finally, the success of cultural studies has led to a growing interdisciplinary commitment to the study of the relationship between politics, culture, and economics on the part of students of contemporary as well as earlier cultures. We see these factors at play in the more narrowly defined field of Adam Smith studies. No longer content to accept and reproduce unquestioningly the dominant teleological canonization of WN as the Ur-text of neoclassical economics, scholars have insisted instead on the need to appreciate the work on its own terms – and therefore qua text. They have also argued against studying Smith’s individual contributions in isolation and for studying them within the context of late eighteenth-century discursive practices and their ongoing ramifications. Smith’s pronouncements on language and rhetoric have consequently been scrutinized anew while his best known works have been subjected to a variety of rhetorical analyses, studied for their impact on the modern novel, and plumbed for new insights into the aesthetic dimension of late eighteenth-century private as well as public moral philosophy. Inversely, the social, political, and economic dimensions of aesthetic concepts such as spectatorship and the sublime have also come under the microscope. Furthermore, not only have these varied investigations yielded their own discrete insights, they have also resulted in an increasingly complex appreciation of Smith’s multifaceted cultural and political legacy. The central role played by literary studies in the comprehensive reappraisal of Smith’s oeuvre and author functions that has been taking place in recent years cannot be overstated. In particular, literary perspectives have, as one would expect, added to our understanding of such intratextual matters as the relationship of Books IV–V to Books I–III of WN. More broadly, however, they have also allowed scholars to question the compartmentalization of Smith’s works and to study them intertextually as well as in relation to extratextual cultural phenomena. Indeed, what could easily have been little more than an academic fad has radically altered traditional Smithian scholarship and forced a reconsideration of some of its most cherished assumptions. The new literary-critical approach to Smith has, for instance, put recent attempts at resurrecting the old Adam Smith problem to the test.5 Or, rather, it has forced a redefinition of the terms of the problem. The question is no longer: how does one reconcile the potentially mutually exclusive ethical frameworks of two separate works by the same author, but how does one account for the internal contradictions at the heart of these respective works and of Smith’s oeuvre as a whole? Indeed, the most important upshot of the adoption of literary questions and methods to the study of Smith has been the growing appreciation of the internal manifestations of Smith’s own ambivalence, from his reservations on the socio-political impact of the generalized application of the division of labour (West 1996) to his historicization of the natural price (Leonard 1995), to his praise of early versus late production

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models and belief in the moral superiority of agriculture over commerce (Heinzelman 1995, Labio 1997, Sutherland 1998 [1993]), to his inclusion of envy in his conjectures on sympathy and the constitution of the subject (Dupuy 1987, Morillo 2001, ch. 5), to his qualms, articulated in both The Theory of Moral Sentiments (TMS) and WN, regarding the desirability of laissez-faire capitalism (Pack 1991), the morality of commerce (G. Skinner 1999), and the fate of morality in a commercial society (Michie 2000). The ambivalence at the heart of Smith’s philosophy mirrors his misgivings regarding the changes that were taking place in the eighteenth century in the socio-political and economic spheres. Smith understood these changes as well as anyone. One might even argue that he promoted them by analysing them as systematically as he did. At the same time, he was wary of this new world and thought that language, literature, and the arts could – in conjunction with morality – assist his contemporaries in guarding against the excesses of modernity. It is therefore only fitting that applying the tools of literary and cultural studies to Smith’s body of works has allowed scholars from different disciplines to better understand its complexity. The main goal of the present survey is to review the scholarly contributions that have been made in the last three decades or so. It is broken into four sections, which focus in turn on the rhetorical, literary, aesthetic, and cultural dimensions of Smith’s thought and its reception.

I Rhetoric

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The number of works devoted exclusively or primarily to Smith and rhetoric is relatively small, but they exemplify a major trend in Smith studies: the push towards connecting Smith’s works instead of perpetuating the division of labour that used to confine economists to the study of WN and literary scholars to that of TMS and the Lectures on Rhetoric and Belles Lettres (LRBL).6 This development accounts in part for the rediscovery of some of Smith’s lesser-known works, most notably the ‘History of Astronomy’ (‘Astronomy’ in Smith 1980) and the ‘Considerations concerning the First Formation of Languages’ (‘Considerations’ in Smith 1983). This, in turn, has allowed scholars to appreciate how indebted Smith’s celebrated writings on morality and economics are to his views on language and the imagination. A.S. Skinner (1983, 1996) compares LRBL to other works by Smith, especially TMS and the ‘Astronomy’, both of which he sees as early articulations of the importance of the imagination in Smith’s oeuvre.7 Bryce (1983, section 4) underscores the need to see LRBL as reflecting eighteenth-century preoccupations with questions of taste, the practice of literary criticism, and the emerging discourse of aesthetics. Endres (1991) offers close readings of key passages of WN in an attempt to demonstrate that the composition of WN adheres in large measure to the rules introduced in LRBL. Plank (1992) and Otteson (2002a) concentrate on the ‘Considerations’ and draw parallels between this early essay, WN, and

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TMS. Streminger (1995) summarizes the views expressed in LRBL and the ‘Considerations’ and argues that LRBL and TMS must be seen as ‘two halves of a system’ made up of aesthetics and ethics and which allows us to ‘participate in other people’s actions and sensations’ (p. 135).8 Phillipson (2000) argues that Smith’s views on language and rhetoric played a vital role in the elaboration of the theory of human nature and sociability upon which Smith’s historiography and views on the acquisition and practice of morality would later rest. Building on Pocock (1985), Clark (1992) stresses the importance of conversation in allowing individuals to reach a kind of epistemological equilibrium in matters moral as well as commercial. In Smith’s system, Clark maintains, it is precisely the rhetorical dimension of commercial activities that ensures their morality. Indeed, rhetoric plays a crucial role in tying together virtue and self-interest, morality and commerce, which, in opposition to Hirschman (1977), Clark refuses to view as antithetical values and activities. In a somewhat similar vein, Kalyvas and Katznelson (2001) contend that studying all of Smith’s works together allows us to recognize that Smith saw rhetoric as a crucial instrument of social and moral recognition. The interest in Smith’s views on rhetoric has been more than matched by concern with his own rhetorical practice on the part of a significant number of scholars with very different agendas. Rashid (1982) and Coase (1994) focus on Smith’s rhetoric because they wish to validate the generally accepted notion that the extraordinary success of WN can be attributed to its literary qualities. This same notion has led Diamond and Levy (1994) to a somewhat eccentric demonstration of the importance of style in contemporary economic writing. Having plotted the connection between key stylistic features of ninety-seven American Economic Association presidential addresses and their citation frequency, they conclude that the key to rhetorical success still lies in adhering to the active voice and the ‘natural’ English word order already insisted upon by the author of WN. In a very different vein, Bazerman (1993), who sees himself as part of a movement ‘to rescue Smith from his reputation . . . as the founding father of modern economics’ (p. 174), argues that WN represents the apex and telos of Smith’s rhetorical practice. However, the analysis of the evolution of Smith’s rhetorical strategies from LRBL to WN upon which he bases his assessment of the rhetorical pre-eminence of WN also impels him to stress the importance of Smith’s early work on rhetoric and the extent to which it drove Smith to define knowledge, ethics, politics, and the economy as communal in nature. Bazerman’s appreciation of the critical role played by Smith’s rhetoric in the evolution of his philosophy owes much to McCloskey’s daring insistence on the need to take rhetoric seriously in economic methodology and in the history of economic thought. This challenge was taken up most notably by Vivienne Brown in her landmark intertextual study of Adam Smith’s discursive practices and in subsequent articles. Relying on a Bakhtinian framework, Brown (1994) has argued persuasively that when

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one places Smith’s texts in the broader context of eighteenth-century intellectual history and reads them according to their separate discursive frameworks rather than on the basis of a spurious presumption of authorial unity, the notorious ‘Adam Smith problem’ becomes a non-issue. According to Brown (1994, 1997a), TMS is dialogic because it deals with the higher order of individual morality, which is exercised by means of a dialogic process within the individual conscience and involves the need to factor in the expectations of an impartial spectator. By contrast, WN is largely monologic because it is concerned with a basically amoral social practice which can be dealt with at the level of the second-order virtues of justice and jurisprudence. This distinction, Brown (1997a) argues more broadly, reflects and constitutes in turn ‘the detachment of moral and economic discourses that has characterized so much of Western European intellectual history’ (p. 709) since the publication of TMS and WN. Brown’s demonstration of the importance of rhetoric in Smith’s philosophy has had and will continue to have a considerable impact, even in those cases where scholars seek to distance themselves from some of her propositions. Griswold (1999) agrees that WN deals with jurisprudential matters, but counters that jurisprudence is first and foremost a branch of moral philosophy.9 Griswold also acknowledges that the rhetorical complexity of WN and TMS owes much to the aesthetic dimension of Smith’s ethics, but he nevertheless insists on the moral dimension of WN, an insistence that is not unproblematic since Smith’s aestheticization of ethics revolves around the imagination, which is defined as an inherently deceitful faculty. Following in Brown’s footsteps, Peil (2000) argues against studying each text separately and calls for the adoption of a Gadamerian hermeneutical model that factors in differences between authors’ and readers’ frames of reference. Building on the work of both McCloskey and Brown, Cremaschi (2002) acknowledges the epistemological or cognitive (as opposed to ‘merely’ stylistic) function of metaphors in Smith’s works and focuses on similarities of ‘voice’ among WN, TMS, and the Essays on Philosophical Subjects. The remaining key contribution to the study of rhetoric in Adam Smith comes not from a historian of economic thought, but from a literary scholar and the author of the unfortunately often overlooked Economics of the Imagination (1980). In his more recent work, Heinzelman (1995) argues that WN adheres in significant measure to the literary order of the Virgilian georgic while also attempting to ‘divest and discard’ (p. 194, n. 18) that very genre, thereby staging the conflict between what ancients texts had to say about husbandry and evidence from contemporary practice. For Heinzelman, as for the above-mentioned historians of economic thought, rhetoric must not be confused with style. In this instance, rhetoric has a performative function: it stages a conflict that points to Smith’s fundamental ambivalence or anxiety towards modernity, or, to be more accurate, towards modern forms of production and commercial exchange.

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II Literature Heinzelman has not been alone in reminding today’s readers of Smith’s ties to classical literature. Vivenza (2001 [1984], ch. 5) appraises the extent of Smith’s intellectual debt to the classics, including ancient literature, while Africa (1995) provides a close reading of Smith’s handling of the Vedius Pollo anecdote in WN. As one would expect, however, scholars have tended to concentrate on Smith’s indebtedness to representatives of more modern literary traditions. Ross (1995a, ch. 20) records Smith’s opinions of various literary figures, including Livy, Shakespeare, Dryden, Dr Johnson, Pope, and Hume, and makes a note of Smith’s friendship with Henry Mackenzie, the author of The Man of Feeling (1771). Dawson (1991) recounts the warm welcome Smith received during his stay in France and documents his knowledge of French and its literature before examining the extent to which Smith’s views on sympathy were influenced by the fiction, drama, and poetry of a variety of French authors from Marivaux to Marie Riccoboni. Force (2003) provides a genealogy of Smithian economics that centres around the figures of Mandeville and Hume as well as La Rochefoucauld, Bayle, Montesquieu, and Rousseau. The principal benefits of the study of Smith’s relation to literary texts extend beyond findings of literary influence, however. Three other issues have recently been brought to light: Smith’s part in the making of English literature as an academic subject (a topic that will be discussed in the last section of this survey, ‘Smith Unbound’), literature as a cornerstone of Smithian philosophy, and Smith’s impact on the history of the modern novel. In a short section titled ‘Adam Smith’s Lectures on Rhetoric’, Phillips (2000: 82–7) observes that Smith preferred ancient to modern historiography because the former relied on narration whereas the latter was too dependent on proofs, notes, and demonstrations. Phillips also contends that Smith’s argument regarding Tacitus’s use of indirect narration – which the Scottish philosopher interpreted as a sign of concern with the emotional or at least private life of public figures – anticipates Smith’s own commitment to a spectatorial and sentimental narrative. From a literary historical point of view, the importance of Phillips’s brief remarks lies in their demonstration of the centrality of narrative in general and of sentimental narrative in particular to our understanding of the public sphere. Ideally suited to an exploration of the private lives of individuals, narrative becomes defined by Smith as that which can best represent public life as well. Hence the novelistic (as well as dramatic) qualities of TMS and WN noted by Griswold (1999, ch. 1, esp. 59–63 and 66–70). Motooka (1998), like Phillips, sees narrative as performing an epistemological and political function. Unlike Phillips, however, who emphasizes similarities between the spectatorial and sentimental outlooks, Motooka insists on the need to distinguish between spectatorial narratives and sentimentalism.10 According to her, the spectatorial point of view stresses

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impartiality, agreement, and sameness and suppresses differences, particularly gender differences. By contrast, literature in general, and sentimental literature in particular, is dedicated to the reintroduction of the variety that an impartial or universalizing spectatorial posture threatens to suppress. Motooka’s and Phillips’ position echoes to a certain extent Nussbaum’s (1990, esp. 338–64; 1995, esp. 72–7) reliance on Smith for her defence of literature as an important tool in the exercise of moral judgment. In Nussbaum’s view, ‘there are aspects of the imagination of the reader that lead toward social equality rather than its opposite, that tend to detect and undermine hierarchies of race and class and gender’ (1995: 76). This article of faith rests partly on her reading of Smith as a thinker who believed strongly that reading stories is a highly moral activity inasmuch as it forces readers to imagine themselves in someone else’s situations. Like Motooka and Phillips, Nussbaum puts literature at the centre of Smith’s moral universe and sees fiction and the imagination as discharging essential public functions in spite of their apparently private performance. Unlike Motooka, however, Nussbaum sees no incompatibility between the spectatorial and sentimental points of view. The impartial or judicious spectator confirms the moral validity of the sentimental identification while the imaginative identification that takes place through reading can be thought of as ‘a test for correctness of real-life judgment and response’ (Nussbaum 1990: 339). According to Nussbaum, this is in keeping with Smith’s conviction that ‘literary readership is structurally isomorphic to the spectator’s moral role’ (p. 339). Though the universalism of the spectator and the sentimentalism of the individual reader may be conceptually at odds, they inhabit a common moral and imaginative universe that makes them interdependent. Smith’s faith in the importance of narrative has increasingly led scholars to study the modern novel in relation to his moral philosophy. This development fits in well with the commonly held belief that the so-called ‘rise’ of the English novel was inextricably bound to the emergence of new economic and social realities in the eighteenth century. Indeed, it is this set of factors, even more than ‘Smith’s commitment to narrative’, to borrow Phillips’s felicitous phrase (2000: 83), which has led scholars working on the history of the novel to bring the Scottish philosopher back into the fold of literary studies.11 Thompson (1996) summarizes this trend as succinctly as anyone when he refers to ‘the twin discourses of the novel and political economy’ (p. 24). By his own account, Thompson is ‘still following the line of cultural history that descends from Max Weber through R.H. Tawney and on through Ian Watt and Michael McKeon – the argument that the rise of the novel is related to the rise of capitalism, that the novel as a distinctly new form of narrative tells the story of the modern individual, the centred subject’ (p. 187). Smith has come to epitomize one half of this diptych, and references to both WN and TMS have as a result become routine in literary histories of the novel.12 As the following overview of the wide-ranging but somewhat scattered recent

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literature on the subject makes clear, however, no consensus has emerged among literary scholars regarding the impact Smith’s philosophy and its reception have had on the development of the modern novel, a topic still in need of comprehensive analysis. Bellamy (1998) sees the development of the eighteenth-century novel as having been tied to an erosion of the tradition of civic humanism in favour of a new set of values organized around the maximization of wealth and the weakening of the differentiation between the public and private spheres. In her discussion of Smith, she shows herself to be a late proponent of the TMS–WN incompatibility theory and insists that political economy has little to do with moral philosophy. G. Skinner (1999) takes Smith’s misgivings regarding the spread of commerce practically for granted and draws parallels between Smith’s views and those expressed in sentimental novels. In an intriguing essay, Andriopoulos (1999) contends that Smith’s metaphor of the invisible hand is inherently gothic. Tracing the famous figure of speech back to an early reference to ‘the invisible hand of Jupiter’ in the ‘Astronomy’, Andriopoulos submits that it has more to do with the supernatural and its fictional representation than with the even-handed, almost mechanistic, regulation of market forces. France (1990) maintains that ‘we can see in Jane Austen’s novels a critical illustration of Adam Smith’s ideas about propriety, sympathy and the necessary negotiation between selves’ (pp. 45–6). Michie (2000) takes France’s brief remarks a step further. Drawing on Pocock (1985), she characterizes Austen’s novels as deliberate exercises in Smithian ambivalence. According to Michie, Austen’s fiction stages the conflict between virtue and wealth that Smith had wrestled with and dramatizes his misgivings regarding the status of morality in a commercial society. In particular, Michie claims that the evolution of Austen’s novels illustrates that what Smith had identified as a choice between wealth and virtue was soon replaced by a more exclusive focus on wealth. Rosenblatt (2002) draws attention to the Smithian dimensions of Isabelle de Charrière’s Trois femmes (1796) and Benjamin Constant’s Adolphe (1816, written 1806–07). Lastly, not all critics have restricted themselves to studying Smith in relation to his contemporaries and immediate successors. Coovadia (2002) contends that George Eliot’s writing is representative of nineteenth-century writers’ tendency to evoke, albeit indirectly, the language used by Smith in WN and TMS. Sutherland (1987) gives a detailed account of the influence of WN on the novels of Walter Scott and, more generally, on nineteenth-century realism, whose success, like the Smithian economy, hinges on our ability to confuse fiction and the real, value and labour, words and things, and on our willingness to believe that individual actions are part of an overall rational design or plot. Brown (1995) points to significant affinities between the dialogical exercise of moral judgment in TMS, Dostoevsky’s Crime and Punishment, and Shakespeare’s Hamlet while also underscoring that TMS, unlike the two works of fiction, is distinguished

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by the absence of a final ethical resolution. De Graef (2003) traces back to WN and TMS what he sees as the simultaneous rejection and exercise of the sympathetic imagination by the principal male protagonist of J.M. Coetzee’s novel Disgrace (1999).

III Aesthetics

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Even those scholars who have written on the subject of Smith’s forays into aesthetic theory downplay the intrinsic worth of his contributions. Streminger (1995, ch. 5) merely summarizes the essay on the ‘Imitative Arts’ included in the Essays on Philosophical Subjects in order to compensate for the fact that Smith’s ideas on languages and imitation are ‘almost completely unknown’ (p. 219). Malek (1972) concludes modestly that Smith’s essay on imitation ought to be remembered for his ‘analysis of the essential differences in intrinsic constitutive principles between vocal and instrumental music’ (p. 54). Lafon (1996) suspects Smith of ‘conservatisme’ in matters of artistic creation in part because of what she identifies as a surprising relative lack of interest in the question of genius on the part of a Scottish philosopher (p. 87). Jones (1993) summarizes Smith’s entire body of criticism on the arts and on literature only to offer the following, rather underwhelming, assessment of Smith’s contribution: Smith’s remarks on the arts had little if any influence on later writers. His emphasis on the intellectual aspects of our responses, as distinct from the sensual, is important but one-sided, but the anchorage of his views in literature had inevitable consequences for his often disappointing remarks on the non-verbal arts. He agreed, of course, that we derive great pleasure from the arts, but he failed to build on his ideas about the distinctive expressive character of music. (Jones 1993: 60–1) Because of his fairly narrow definition of the aesthetic, Jones overlooks what many others have correctly underscored, namely, the essentially aesthetic dimension of Smith’s ethics. As noted by Lyons (1993), Smith believed that moral judgments essentially proceed from a tendency to judge people and conducts in aesthetic as well as ethical terms, that is, as sources of beauty and pride, ugliness and shame, pleasure and admiration, and as expressions of the desire to be loved as well as great (pp. 43–5). According to Lyons, exploring the complexity of a society’s aesthetic standards is a central feature of TMS, which is overwhelmingly not devoted to ‘judgments concerning wrong-doing that warrants resentment and punishment’ (p. 41). Lyons was, of course, building on the crucial observation made by Raphael and Macfie (1976) in their introduction to TMS: Both Hume and Smith learned from Hutcheson to keep aesthetics in mind when thinking about ethics. In Treatise of Human Nature, II.ii.5,

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This same passage is used by Harrison (1995) as a starting point to his reflections on the ‘Imagination and Aesthetics in Adam Smith’s Epistemology and Moral Philosophy’. Like Lyons, Harrison stresses the importance of pleasure as a motive for action and Smith’s ‘aesthetic desire for harmony and order, for the ease, delight and repose of the imagination’ (p. 95). However, Harrison takes Lyons’s argument a step further and argues that the role of the imagination extends beyond the realm of moral philosophy and that aesthetics, defined as a science of subjective knowledge and normative communication, is an essential element of Smith’s philosophy, from his scientific ruminations on astronomy to his considerations on moral sentiments. Harrison’s appreciation of the centrality of aesthetics to Smith’s overall philosophy allows him not to underestimate the importance of Smith’s contributions to this branch of philosophy and to appreciate their specificity.14 According to Harrison, Smith merged French neoclassical notions of order, decorum, symmetry, and proportion with a new aesthetic of sentiment, fancy, and inspiration. As a result, Smith was not, in Harrison’s eyes, deficient in his grasp of the centrality of the aesthetic to late eighteenth-century thought, but ‘anticipated, and perhaps helped to bring about, the profound change in consciousness which artistically and aesthetically emerged as Romanticism’ (p. 111). Harrison’s recognition of Smith’s relevance to our understanding of late eighteenth-century aesthetics is illustrative of a growing acceptance of the notion that modern aesthetic and economic discursive practices did not just happen to emerge at about the same time, but that they were, in their initial phase of development at least, joined at the hip.15 Guillory (1993, ch. 5, esp. 301–17) articulates this belief as succinctly as anyone when he declares that ‘Smith finds in the aesthetic disposition itself the motor of the economy’ (p. 311), a case Heinzelman (1980, chs 5 and 6), Caygill (1989, esp. 85–98), Bohls (1993), Griswold (1999), Okochi (2000), Bell (2000), and De Marchi (1999, forthcoming [2003]) strengthen by underscoring the driving force of the imagination in economic activity. Heinzelman takes note of the imaginary nature of the demand that drives economic labour and submits that artistic work was recognized well before the publication of WN as the archetype of all varieties of economic labour.16 Caygill maintains that production is driven by the category of the aesthetic, or taste, and that the growth of industry depends on the development of a taste for beauty since more effort is spent on satisfying the potentially

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infinite demands of the imagination than on meeting basic needs.17 Bohls links Smith’s emphasis on labour and its limitless division to this growing ‘diversity of tastes’ (p. 18). Griswold (esp. sections 5.5 and 7.1) puts the imagination’s ability to muddle the distinction between wants and needs and turn us into consumers on a par with the aesthetically driven tendency, explored in TMS, to confuse happiness and social approbation. Okochi argues that the realization that commerce is driven primarily by imaginary wants leads to a more generalized aestheticization of modern societies. Taking up the argument made by Engell in The Creative Imagination (1981), Bell contends that Smith’s attempt at reconciling morality and economics rested in part on the growing belief in ‘the constitutive function of the imagination’ (p. 107) and notes the key role played by this faculty in eighteenth-century debates concerning luxury. For Bell, the debate, and Smith’s imaginative turn, illustrate the growing realization that there is an inverse relationship between a luxury item’s usefulness, which is poor, and its (economic) utility, which is high. De Marchi (1999) argues that Smith’s awareness of the ingenuity involved in aesthetic activity allowed him to reconcile his personal distaste for luxury with his understanding of the potentially infinite nature of consumer demand. De Marchi (2003) accordingly rescues Smith’s essay on the imitative arts from its critical purgatory and brings to light that there is more to this essay than its somewhat conventional ranking of the arts.18 In this work, De Marchi argues, Smith challenges the notion that the enjoyment we derive from imitation stems from the artist’s ability to create deceptive resemblances and from the inherent beauty of its subject. Smith submits instead that contrivance, artifice, and ingenuity are the primary sources of the pleasure we take in the arts. As a result, the arts come to be seen as stimulating consumption and as the driving force behind the labour upon which Smith’s economic system rests. Defining modern economic activity as that which aims to satisfy the demands of the imagination has led scholars to investigate Kant’s relationship to Smith, particularly with respect to the Critique of Judgment. Heinzelman (1995) notes the role of agricultural treatises, ‘the genre out of which the Wealth evolved’ (p. 179), in the formation of the aesthetic category of originality. Labio (1997, 2004) argues that Smith’s idealization of agriculture as ‘the original destination of man’ (WN III.i.3) rests on rationales also invoked by Kant and others in their conceptualization of originality as a criterion of aesthetic judgment. Valihora (2001) offers a Kantian reading of TMS and draws on the Third Critique ‘to tease out some of the implications of Smith’s use of a model of aesthetic judgment to arrive at specifically moral sentiments’ (p. 139). Shell (1976) notes the distinction drawn by Longinus between sublimity and economy – sublimity transports, economy persuades – and reminds us of the classic definition of the economy as a kind of appropriateness. ‘In “Économies de paroles”’, for example, Shell notes, ‘Voltaire defines “economy” merely as “speaking

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according to the time and place”’ (p. 424). By contrast, Leonard (1995) and Andriopoulos (1999) bring home the notion that the modern economic imaginary is thoroughly invested in ‘the sublimity of a consumption without limits or boundaries’ (Andriopoulos, p. 745) and is therefore more attuned to a Kantian aesthetic of the sublime. Recognizing the aesthetic dimension of Smith’s philosophy has led to a reassessment of the function of sympathy and the impartial spectator in TMS and of the place of this particular work in Smith’s oeuvre. Brissenden (1969), Barisch (1981: 243–55), Marshall (1986, ch. 7), Mullan (1988), Dupuy (1987; reprinted 1992, ch. 3), Brown (1994), and Force (1997) all recognize that sympathy involves one’s ability to engage in an ‘imaginary change of situations’ (TMS I.i.4.2; quoted by Force on p. 60) or, more accurately, to identify with someone else (Dupuy 1987: 321; reprinted 1993: 85). Opinions vary greatly, however, as to the moral dimension of this pursuit, especially to the extent that it entails identifying with an impartial spectator. Brissenden thinks of the impartial spectator as anticipating the Freudian superego and as functioning essentially at the level of the individual. Marshall, by contrast, insists on its social function. So does Todorov (1996), who compares Smith’s impartial spectator to George Herbert Mead’s ‘generalized other’ and Mikhail Bakhtin’s ‘superaddressee’ (p. 8). Deferring to an impartial spectator signals a readiness to be bound by social norms. Barisch questions the morality of such a notion. On the one hand, promoting sympathy fails to take into account, as Hume had already objected, the popularity of public executions.19 On the other hand, and more importantly, the exercise of sympathy validates our desire for social recognition and induces us to adopt a detached attitude towards our own actions, that is, to aestheticize them. For Barisch, the theatricality inherent in the exercise of sympathy compels us ‘to become not merely spectators but disinterested spectators of our own acts’ (p. 251).20 Todorov (1996) does not necessarily disagree with Barisch’s account, but reaches a different conclusion. First, Todorov sees the ‘desire for fame and consideration, shame and guilt, fear of lack of esteem, need of gratitude, appeal to the gaze of the other . . .’ (p. 8) that lie at the heart of Smith’s TMS as descriptive rather than normative – a position not very dissimilar to Levy’s (1995). Second, Todorov approves of Smith’s attempt to define man as a social animal instead of settling for the definition of human beings as individualistic and asocial that Todorov believes mainstream European thought has historically tended to take for granted. Brown (1994) emphasizes the moral dimension of TMS’s impartial spectator by contrasting this figure to that of the invisible hand in WN. Whereas appealing to an impartial spectator forces us to perform a moral act – to imagine ourselves in someone else’s situation – the invisible hand metaphorically rules over economic exchanges that are theoretically symmetrical and therefore leave differences between individuals out of the equation. The distinction is well taken and is vastly preferable to Mason’s

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(1993: 238) contention that WN makes no room for the imagination because it is basically about self-interest. However, one could also argue that it is the very invisibility and blindness of the hand that presides over market economies which guarantee its morality, or at least justice. Also, although one can certainly argue that the exercise of sympathy is inherently moral, one could also maintain, with Barisch, that it involves an individual’s willingness to substitute social prejudices for individual judgment and is therefore, as such, fundamentally immoral. Barisch’s reservations bring us back to the relationship between Smith and Kant and point to a key difference between the two thinkers. Kant defines aesthetic judgment as a negotiation between the distinct realms of the understanding (and its application to the world of nature) and reason (and its application to the practice of freedom). Within this system, aesthetic judgment and moral practice are, it is important to remember, conceptually separate. As a result, whereas Kantian morality is free, it is most definitely not disinterested. By contrast, Smith conflates the moral and the aesthetic, which accounts in part for critics’ differences of opinion regarding the morality of the imaginary identification upon which sympathy depends.

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One cannot overstate the role played by literary/textual concerns in the reassessment that has defined the Smithian scholarship of recent decades. At the same time, one must also recognize the extratextual dimension of this literary turn and account for the ways in which ‘Adam Smith’ exceeds the bounds of the volumes published under his name. Smith, to use the terminology expounded by Michel Foucault in the famous ‘What Is an Author?’, a lecture first delivered and published in French in 1969, is not just another prolific or even influential writer, but an author who fulfils a remarkable array of author functions in debates driven primarily by late twentieth-, early twenty-first-century preoccupations. When Guillory (1993), for instance, argues that aesthetics borrowed the concept of value from political economy (p. 274) or that ‘both aesthetics and economics were founded in contradistinction to the concept of “use value”’ (p. 302), he is, of course, referring to Smith’s decision to set value-in-use aside in favour of a labour theory of value and to Kant’s foundational association of the aesthetic with disinterested appreciation, which caused aesthetic value to be defined precisely as value that is not economic in nature. It is essential to note, however, that the question of the consanguinity of aesthetics and political economy has important contemporary applications for Guillory, who is not studying late eighteenth-century thought for its own sake, but is, like Terry (1997), drafting Adam Smith in late twentiethcentury debates over literary canon formation. Shapiro (2002 [1993]) self-consciously illustrates this tendency. Reading ‘Adam Smith’ relies heavily on the language of post-structuralism in order

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to explore to what extent the name of this particular author – what Shapiro calls the ‘normativized’ Adam Smith (p. xxiv) or the ‘Smith Effect’ (p. xxvi) – has been made ‘to stand in the way of a politicized apprehension of modernity’ (p. xxvi). This explains why a work avowedly intended to illustrate the need to paying close attention to Smith’s narrative devices opens with remarks on the EMU (Economic and Monetary Union) and the fall of Margaret Thatcher. Even more remarkably, ‘Adam Smith’ has recently been appropriated by writers whose works are predicated on very different ideological premises. Everyone is familiar, of course, with the many ways in which Smith has functioned as the undisputed champion of economic liberalism. Fleischacker’s (1999) commandeering of both Smith and, for good measure, Kant and the Critique of Judgment in the service of a ‘thoughtful liberalism’ (p. 87) after the fall of the Berlin Wall typifies this trend. Hill (2002), on the other hand, draws on Smith in an attempt to bring an end to Marxism’s turn away from theory in the 1960s, while Todorov (1996) uses Smith’s emphasis on sociability in an essay in which he inveighs against Western philosophy’s atomistic definition of the subject, which is, in Todorov’s view, too bound ‘with that other weary tenant of Western philosophy, the permanent war of everyone against everyone else’ (p. 14). As a growing number of scholars from the social sciences as well as the humanities have successfully demonstrated, there is nothing arbitrary about the merger that has been taking place between cultural criticism and Smithian studies in the last few years. Herbert (1991, ch. 2) puts the matter succinctly in his study of the emergence of an ethnographic definition of culture in the nineteenth century. In Herbert’s view, the social model put forward in WN is ‘an integral, quasi-natural system the one essential function of which is the maintenance, through a network of specific institutions, of its own equilibrium’ (p. 79). It is this systematic model, further buttressed by such works as TMS and the ‘Astronomy’, that allowed Smith to lay the groundwork for the sociological and anthropological definitions of culture that would be crystallized in the following century. This system and its maintenance depend in great measure on the establishment of an agreement regarding the ‘proper place’ of various groups of people. It is true that in order to counter the prevailing canonization of Smith as the patron saint of laissez-faire economics, critics have been reminding us of Smith’s own qualms about modern economies, qualms expressed most dramatically, as discussed by West (1996), in his severe indictment of the debilitating impact of the division of labour in book V of WN (WN V.i.f.50). Recently, however, scholars have also turned their attention to Smith’s defence of the existing social order and to his contributions to the discourses of class, colonialism, and gender. Morillo (2001, ch. 5) invites readers to read TMS alongside WN and to eschew what he correctly identifies as the tendency to focus too narrowly on sympathy (as opposed to more negative sentiments such as deception

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or envy) and to be wary of describing feelings as the expression of a moral faculty. Morillo insists instead on the relationship that exists between the elaboration of a language of the passions and the mise en place of an emerging discourse of class. There are, according to Morillo, both overt and covert manifestations of this double phenomenon. Morillo notes, as other have done, that emotions such as ambition, pride, and envy denote the extent to which status matters in Smith’s system. He also reminds the reader that Smith’s stated preference for order – a largely aesthetic category – has led him to argue that defending the existing social structure should outweigh ‘even the relief of the miserable’.21 In addition, Morillo maintains, the language of class depends on a series of internal, or covert, contradictions built within TMS and at the interstices of TMS and WN. Nowhere is this more in evidence than in Smith’s ambivalent pronouncements about ambition. According to Smith, ambition is a socially positive feeling. One might even call it a moral good. This good has to be rationed, however, since too much ambition on the part of members of the lower ranks of society could disrupt the existing social order. Morillo’s analysis of ambition in Smith points to ‘Smith’s critical ambivalence about the proper role of the passions in a just society, one that he represents ever more directly as a class society’ (p. 182). It also exemplifies what Phillips (1996) has called ‘the reciprocity between social and sentimental interests that characterized Scottish enquiry in particular and eighteenth-century social thought more generally’ (p. 306). This confluence between Smith’s reflections and what A.S. Skinner (2003) has called ‘a particular Scottish approach to the study of the social and moral sciences in the eighteenth century’ (p. 178) has led scholars to emphasize the distinctively Scottish nature of Smith’s contributions. Phillipson (1974, 1981, 1983) argues that there was a uniquely Scottish sense of urgency behind the nexus of commercial, social, and moral forms of valuation at the heart of Smith’s philosophy. This nexus allowed relatively prosperous lowland Scots to offset the loss of political independence that had followed the passing of the Act of Union in 1707 in part by defining Scotland as a commercial, polite, and virtuous society whose key institutions were clubs, coffee houses, learned societies, and universities, not parliament or the aristocracy. Scholars such as Phillipson (1974, 1983), Sher and Hook (1995), Ross (1995b), and Pittock (1997) have been eager to resituate Smith in this particular context. Phillipson (1974) underscores Smith’s role in the foundation of the Select Society of Edinburgh in 1754. Ross (1995b) reviews the years Smith spent in Glasgow and notes his membership in the Glasgow Society, founded in 1752. Sher and Hook (1995) record that the ‘Glasgow Enlightenment’ revolved around the university even more than was the case in other Scottish cities. Pittock (1997) notes the importance of the network that bound Scottish universities together and underscores their ties to continental institutions, particularly in France and the Low Countries.

166 Catherine Labio One essential feature that emerges from these studies is the crucial role played by literati and literary criticism in the Scottish Enlightenment. This in turn provides a new context for our appreciation of the significance of Smith’s LRBL and of his reflections on language and letters. Bringing a much needed corrective to the generally accepted notion that the study of English literature as an academic discipline only dates back to the 1820s, Court (1992, ch. 1) underscores Smith’s foundational role in the promotion of the study of English literature, including the modern novel, which the Scottish philosopher believed ought to play a vital part in the ethical and commercial education of the sons of Scotland’s growing merchant class. Crawford (2000 [1992], ch. 1) also pays close attention to Smith’s remarks on language and literature in his study of the strong devolutionary pressures that have shaped the making of English literature as an academic subject. In a chapter entitled, provocatively, ‘The Scottish Invention of English Literature’, Crawford argues that Smith’s defence of ‘proper English’ partook of the discourse of ‘improvement’ dear to the Enlightenment in general and to the Scottish Enlightenment in particular. In the latter case, mastery of proper English, acquired in part through exposure to good examples of modern English style was to lead to the adoption of English standards of propriety. Smith’s lecturing style and his emphasis on modern writers were meant to emphasize the importance of adopting English models to Scots concerned with upward mobility and desirous to hold public office and participate fully in the post-1707 commercial and intellectual marketplace.22 Smith is not only, then, one of the fathers of modern economics, but ‘a progenitor of English studies’ (p. 28), a somewhat paradoxical but persuasive claim that proceeds in part from the realization that the Enlightenment’s belief in progress resonated with particular intensity in a land often depicted as staging with particular intensity the eighteenth-century tension between primitive culture and civilized society. Harkin (2002) argues that Smith’s interest in primitivism, which he shared with almost every other Enlightenment figure, and his depiction of the North American ‘savages’ as lacking sympathy allowed Smith to present an alternative to the dominant historical narrative of progress and reflect Smith’s own ambivalence about modernity and its tales of progress. On the other hand, Smith’s pro-British stance does not lead Gibbons (2003) to support the view that ‘English literature’ is a product of the margins of British culture, and therefore, in a sense, always already devolutionary in nature. Nor do Smith’s reflections on primitivism suggest that moving away from the centre of power is a viable or desirable solution to the problems associated with modernity. Instead, Gibbons argues, Smith’s support of the Act of Union and the views he put forth in TMS constitute an invitation to confuse Britishness and impartiality. According to Gibbons, who follows in this instance the argument made by Viswanathan (1989), Smith’s assimilationism actually provided a model that could be used to show subjects as far away as India how to interiorize British and

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imperial models of behaviour. TMS in particular invites distant subjects to invest in their own colonization and allows for what Gibbons calls a ‘realignment of the inner life of the subject, [in which] the “impartial” readily evolved into the “imperial” spectator’ (p. 98). The study of Smith’s works from a post-colonial perspective is still in its infancy. Such is not the case with the study of Smith in relation to questions of gender. This particular line of inquiry has resulted in an overwhelmingly negative assessment of Smith’s contributions in this area, branded, in one memorable formulation, ‘an index of Smith’s lower philosophical pressure’ (Kay 1986: 72). In particular, scholars have insisted on the invisibility of women’s labour and on the deleterious effect of the gendered nature of the public versus private distinction at the heart of TMS and WN. Heinzelman (1980) remarks that labour is a gendered notion for Smith: Not only is Smith’s labour necessarily male, it must also be understood as ‘the economic expression of manhood’ (p. 145). Rendall (1987) notes that while Smith did not concern himself directly with women’s issues, his views on virtue and commerce had important implications for the reconfiguration of public and private spheres and of the separate roles of men and women in modern Europe. Noting in passing the role played by the novel in this development, Rendall traces, from Pufendorf to Smith, the history of the move away from a public (and masculine) to a private (and feminine) model of virtue dominated as much by the needs of the markets as by the demands of the state. Justman (1993) studies the ways in which contemporary American society still reflects the gendering of the public and private spheres crystallized by TMS. Sutherland (1995, 1998 [1993]) emphasizes the conspicuous absence of women’s labour in WN. Cole (1991) argues that Smith’s notion of sympathy is ‘anti-feminist’ inasmuch as he believes women to be naturally and amorally sympathetic. Men’s sympathy, by contrast, is socially constructed and therefore belongs to the realm of morality. Mokre (2002) contrasts TMS with Wollstonecraft’s A Vindication of the Rights of Women and focuses on the role played by deception in the creation of gender roles.23 Dwyer (1998) goes so far as to claim that Smith’s purported antifeminism is part of a much broader pattern:

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to think of Smith’s socio-economic system as exclusively male. Nyland focuses on the stage theory described in the neglected Lectures on Jurisprudence (Smith 1978) and argues that the Scottish philosopher downplayed the innateness of women’s inferior social status and emphasized instead the extent to which women’s access to power varies historically. According to Nyland, though Smith agreed that women were at a disadvantage in terms of physical strength and because of their roles in the bearing and rearing of children, he does not appear to have espoused the notion that women were intellectually or spiritually inferior to men, but believed that women’s opportunities for greater equality increase as a society reaches more advanced stages of economic development. The age of commerce, in particular, by putting less stock in men’s military abilities, presents more opportunities for women to garner authority and accumulate wealth. In an interesting demonstration of the need for further cross-disciplinary conversations, Nyland (2003) does not refer to the essays in which Clark (1992, 1993) rejects depictions of Smith as an early proponent of a twosphere model characterised by a devaluation of the private sphere. Smith, Clark argues, held that private choices were as important as public ones in a commercial society dependent on the joint exercise of sympathy and morality and of feminine as well as masculine virtues. Nussbaum (1995), whose work is not referenced by Nyland either, makes a related argument when she claims that emotions did not occupy a separate sphere from reason in Smith’s philosophy.

V Conclusion The present survey presents a potentially confusing picture of Smith’s accomplishments. Smith is all at once ‘the founding father of modern economics’, ‘a progenitor of English studies’, a founder of anthropology and sociology, a proto-Marxist defender of economic liberalism, a modern with a primitivist longing for agriculture, a believer in progress through education and commerce who defended the existing social order, a Scot whose defence of English language and literature has been interpreted as evidence of the pre-eminence of the periphery in English studies and as evidence of an imperialist conflation of Britishness with propriety and impartiality, and, finally, a man who may or may not have found women to be intellectually and morally inferior to men and who welcomed the economic opportunities that accrued women over the course of history while also contributing to a rigid gendering of society into private and public spheres. This heterogeneous body of scholarship points to the depth and breadth of the social, cultural, and intellectual changes Adam Smith attempted to take stock of as well as shape, promote, and sometimes curb. It is also a measure of the complexity of Smith’s oeuvre and of the disciplinary fragmentation that has shaped its more recent reception (there is still too little

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mutual awareness of the work done on Smith by scholars in the humanities and in the social sciences). In addition, it reminds us of the need to pay close attention to the differences between Smith’s more descriptive and his more normative statements and to bear in mind, as noted by Force (2003), that ‘Like his classical models, Cicero and Carneades, Smith believes that one gets closer to the truth by arguing both sides of an issue’ (p. 3). These complications notwithstanding, the literary turn of the last thirty years or so has yielded a number of precious insights. First, textual and intertextual approaches to Smith’s works have helped to elide or at least reformulate the old Adam Smith problem. Second, they are allowing us to appreciate how the texts themselves have built-in speed bumps, or sleeping policemen, that caution us against rushing to label Smith as either the father of neoclassical liberalism or as a precursor of Marxist philosophy – while also making clear to what extent Smith did shape modernity and can be said to have been, in significant respects, proto-Marxist. Third, they underscore the importance granted by Smith to rhetoric and narrative as epistemological, political, and cultural tools. Fourth, they highlight the closeness of the ties that bound the emerging discourses of the novel, aesthetics, and political economy during the Enlightenment. Fifth, they bring home the importance of aesthetics in the formation of the commercial and moral subject in the late eighteenth century and enable us to make a case for the logical precedence of the aesthetic over the economic. Finally, they make us aware of the common ground that exists today between literary studies and discrete sub-fields of economic research, particularly in the case of feminist and cultural criticism. Though much remains to be done in each of these areas, what has already been accomplished illustrates the value inherent in bringing as many disciplinary perspectives as possible to bear on such questions. Given what we could, anachronistically, describe as the interdisciplinary nature of Smith’s own contributions, one can only call for greater cooperation between social scientists and literary scholars. As Copley (1995:12) has observed, when it comes to Adam Smith, literary analyses and more traditional commentaries complement each other well.

Acknowledgements I am very grateful to Vivienne Brown, Ryan Hanley, and two anonymous readers for their generous and helpful comments. I also thank Ann Gaylin and Pericles Lewis, who kindly read an early draft on very short notice. An early version of this paper was presented at the annual meeting of the Northeast American Society for Eighteenth-Century Studies, The Graduate Center, CUNY, 17–19 October 2002. I am grateful for the suggestions made by participants in the session devoted to ‘Literary Approaches to Adam Smith’. Needless to say, I alone am responsible for any remaining shortcomings.

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Notes 1 The number of titles in the EconLit database that include the words ‘Adam Smith’ swells from 5 for the 1960–70 period to 74, 106, and 361, respectively, for the last three decades of the twentieth century. A search for the keyword ‘Adam Smith’ in the Modern Language Association bibliography yields 19 records for the decade that stretches from 1961 to 1970, a number that grows to 30, 47, and 66, respectively, for the last three decades of the century, a more modest but not insignificant increase. (The databases were accessed on 6 August 2004.) 2 I discuss this broader trend in greater detail in Labio (2002). 3 Michel Foucault features prominently in this development. Early evidence of his influence can be found in Tribe’s Land, Labour and Economic Discourse (1978), in which Tribe insists on the need to think of economics as a discursive practice and argues, inter alia, that WN ‘only becomes an economic treatise under certain readings’ (p. 113). More recently, the works of Mikhail Bakhtin and Hans-Georg Gadamer have informed such essential works as Vivienne Brown’s Adam Smith’s Discourse (1994) and Peil’s Adam Smith and Economic Science (1999 [1995]). See Tribe (1999) for a review of recent critico-historical approaches to Smith, a review summarily dismissed by Pack (2001). Also see Peil for an overview of the various hermeneutic models that have been applied to Smith’s works and for a call to recontextualize Adam Smith studies on the basis of insights yielded by reader-response theory. This latter approach shapes Allan’s (2002) detailed study of the written comments made by a contemporaneous reader of WN and informs Allan’s broader claims regarding the role played by individual readers in the reception of WN. 4 Recent examples of this particular thread are R.E. Backhouse (ed.) New Directions in Economic Methodology (1994), M. Woodmansee and M. Osteen (eds) The New Economic Criticism (1999), and S. Cullenberg, J. Amariglio and D.F. Ruccio (eds) Postmodernism, Economics and Knowledge (2001). 5 The case for bracketing the Adam Smith problem has been made most forcefully by Dupuy (1987: 314–15, reprinted 1992: 78–9), Brown (1997b: 297), and Force (2003: 256-63). Dupuy (1987) is reprinted in Dupuy (1992, ch. 3). An abridged English version can be found in Dupuy (1993). Dissenters include Teichgraeber (1981), Otteson (2002b, ch. 4), and Montes (2004). 6 See Brown (1994, 1997b), Tribe (1999), and Weinstein (2001) for overviews of recent attempts to connect Smith’s economic and non-economic writings. 7 A.S. Skinner (1996) is based on Campbell and A.S. Skinner (1982) and A.S. Skinner (1983). 8 Translations are mine unless otherwise noted. 9 Haakonssen (1982) links Smith’s impartial spectator to the renewed interest in jurisprudence that took place during the Scottish Enlightenment. 10 So does Mullan (1987), who contrasts the regulatory function of the impartial spectator with the ideal of shared sentimentality embodied in Mackenzie’s Man of Feeling. 11 Copley’s (1994) comparison of WN and Wordsworth’s Prelude, Wesling’s (1998) study of Smith’s influence on Robert Burns, and Dwyer’s (1998) claim that ‘Smith and Macpherson [the author of The Poems of Ossian] belonged to an identical discursive domain’ (p. 10) are rarer incursions into the study of Smith and the history of poetry. 12 This is true even when it is novelistic discourse that is seen as primary or as having influenced Smith (see Bender 1987, ch. 7, esp. 218–28). 13 In his essay on the impartial spectator, Raphael (1975) had already emphasized the importance of the imagination in Smith’s ‘Astronomy’ and in TMS. In this earlier work, however, Raphael underplays the notion of aesthetic pleasure and

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compares the impartial spectator to the ‘voice of conscience’, a phrase with religious overtones that weakens Raphael’s core insight, namely, that ‘[Smith’s theory] was meant to provide a satisfactory alternative to a priori accounts of conscience and morality generally’ (p. 98). The impartial spectator belongs to the realm of the social imaginary, not private morality. Alfonso (2001) also argues that Smith’s aesthetic thought is far more developed than the fragmentary nature of his explicit reflections on the subject suggests and notes that Smith’s overall philosophy exemplifies the centrality of aesthetic criticism to modern thought. Poovey (1994) illustrates how quickly this apparently counter-intuitive proclamation has turned into a truism. The point is bolstered by Mossetto (1993), whose Aesthetics and Economics pushes for the recognition of ‘the economic importance of artistic goods and artists themselves as general case studies for economic theory’ (p. 32). This of course, raises another Adam Smith problem: the apparent contradiction between the contention, in TMS, that aesthetics is the motor of economics and Smith’s labelling of ‘men of letters’ as unproductive in WN II.iii.2. I am grateful to Vivienne Brown for having alerted me to the existence of this paper and to Neil De Marchi for having given me a copy of his manuscript. Mullan (1988) rebuts this objection on pp. 45–6. Valihora (2001) makes a related point when she argues that critics tend to put too much emphasis on sympathy, identification, and the social dimension of moral judgment. According to her, it is the aesthetic distance involved in the exercise of impartial spectatorship that creates the possibility of an absolute standard of judgment, the pursuit of which she sees as a key feature of Smith’s moral philosophy. TMS VI.ii.1.20, quoted by Morillo (2001: 193). According to Easton (2003), a similar logic would later drive Maria Edgeworth’s promotion of a Smithian cosmopolitan commercial model in her attempts to offer a solution to the economic and social inequalities caused by Ireland’s colonial exploitation. C. Gershlager, J.A. Nelson, S.P. Hargreaves Heap, and E. Kuiper also contribute essays that deal specifically with Smith in the same volume.

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France, P. (1990) ‘The commerce of the self ’, Comparative Criticism, 12: 39–56. Gerschlager, C. (2002) ‘Adam Smith and feminist perspectives on exchange,’ in Exchange and Deception: A Feminist Perspective, C. Gerschlager and M. Mokre (eds), Boston, MA, Dordrecht, and London: Kluwer Academic Publishers, pp. 13–26. Gibbons, L. (2003) Edmund Burke and Ireland: Aesthetics, Politics, and the Colonial Sublime, Cambridge: Cambridge University Press. Griswold, C. L. Jr (1999) Adam Smith and the Virtues of Enlightenment, Cambridge: Cambridge University Press. Guillory, J. (1993) Cultural Capital: The Problem of Literary Canon Formation, Chicago: University of Chicago Press. Haakonssen, K. (1982) ‘What might properly be called natural jurisprudence?’ in The Origins and Nature of the Scottish Enlightenment, R.H. Campbell and A.S. Skinner (eds), Edinburgh: John Donald, pp. 205–25. Hargreaves Heap, S.P. (2002) ‘Some ear-picking comments on Adam Smith, feminism and deception’, in Exchange and Deception: A Feminist Perspective, C. Gerschlager and M. Mokre (eds), Boston, MA, Dordrecht, and London: Kluwer Academic Publishers, pp. 55–58. Harkin, M. (1995) ‘Smith’s The Theory of Moral Sentiments: sympathy, women, and emulation’, in Studies in Eighteenth-Century Culture, C.H. Hay and S.M. Conger (eds), vol. 24, Baltimore, MD and London: Johns Hopkins University Press for the American Society for Eighteenth-Century Studies, pp. 175–90. –––– (2002) ‘Natives and nostalgia: the problem of the “North American savage” in Adam Smith’s historiography’, Scottish Studies Review, 3: 21–32. Harrison, J.R. (1995) ‘Imagination and aesthetics in Adam Smith’s epistemology and moral philosophy’, Contributions to Political Economy, 14: 91–112. Heinzelman, K. (1980) The Economics of the Imagination, Amherst, MA: University of Massachusetts Press. –––– (1995) ‘The last georgic: Wealth of Nations and the scene of writing’, in Adam Smith’s ‘Wealth of Nations’: New Interdisciplinary Essays, S. Copley and K. Sutherland (eds), Manchester and New York: Manchester University Press, Texts in Culture, pp. 171–94. Herbert, C. (1991) Culture and Anomie: Ethnographic Imagination in the Nineteenth Century, Chicago: University of Chicago Press. Hill, M. (2002) ‘The crowded text: E.P. Thompson, Adam Smith, and the object of eighteenth-century writing’, English Literary History, 69: 749–73. Hirschman, A.O. (1977) The Passions and the Interests: Political Arguments for Capitalism Before its Triumph, Princeton, NJ: Princeton University Press. Jones, P. (1993) ‘The aesthetics of Adam Smith’, in Adam Smith: International Perspectives, H. Mizuta and C. Sugiyama (eds), New York: St. Martin’s Press; Houndsmills, Basingstoke, Hampshire: Macmillan Press, pp. 43–62. Justman, S. (1993) The Autonomous Male of Adam Smith, Norman, OK and London: University of Oklahoma Press, Oklahoma Project for Discourse and Theory, vol. 14. Kalyvas, A. and Katznelson, I. (2001) ‘The rhetoric of the market: Adam Smith on recognition, speech, and exchange’, Review of Politics, 63: 549–79. Kay, C. (1986) ‘Canon, ideology, and gender: Mary Wollstonecraft’s critique of Adam Smith’, New Political Science, 15: 63–76. Kuiper, E. (2002) ‘Dependency and denial in conceptualizations of economic exchange’, in Exchange and Deception: A Feminist Perspective, C. Gerschlager and

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M. Mokre (eds), Boston, MA, Dordrecht, and London: Kluwer Academic Publishers, pp. 75–90. Labio, C. (1997) ‘The aesthetics of Adam Smith’s labor theory of value’, Eighteenth Century: Theory and Interpretation, 38: 134–49; also in abridged and revised form in Labio (2004, esp. 119–25). –––– (2004) Origins and the Enlightenment: Aesthetic Epistemology from Descartes to Kant, Ithaca, NY and London: Cornell University Press. ––––‘Between literature and economics: gap or dialogue?’ paper presented at the International Text and Economics Conference, University of Antwerp, April 2002. Lafon, S. (1996) ‘La Coutume et la mode dans les théories du jugement esthétique chez Adam Smith’, Etudes écossaises, 3: 77–87. Leonard, J. (1995) ‘ “No limit or certain boundary”: reading Adam Smith’s The Wealth of Nations’, Meanjin, 54: 564–78. Levy, D. M. (1995) ‘The partial spectator in the Wealth of Nations: a robust utilitarianism’, European Journal of the History of Economic Thought, 2: 299–326. Lyons, D. (1993) ‘Adam Smith’s aesthetic of conduct’, International Journal of Moral and Social Studies, 8: 41–60. Malek, J.S. (1972) ‘Adam Smith’s contribution to eighteenth-century British aesthetics’, Journal of Aesthetics and Art Criticism, 31: 49–54. Marshall, D. (1986) The Figure of Theater: Shaftesbury, Defoe, Adam Smith, and George Eliot, New York: Columbia University Press. Mason, J.H. (1993) ‘Thinking about genius in the eighteenth century’, in EighteenthCentury Aesthetics and the Reconstruction of Art, P. Mattick Jr (ed.), Cambridge: Cambridge University Press, pp. 210–39. McCloskey, D.N. (1985) The Rhetoric of Economics, Madison, WI: University of Wisconsin Press. Michie, E.B. (2000) ‘Austen’s powers: engaging with Adam Smith in debates about wealth and virtue’, Novel: A Forum on Fiction, 34: 5–27. Mokre, M. (2002) ‘On Adam Smith and gender construction’, in Exchange and Deception: A Feminist Perspective, C. Gerschlager and M. Mokre (eds), Boston, MA, Dordrecht, and London: Kluwer Academic Publishers, pp. 27–41. Montes, L. (2004) Adam Smith in Context: A Critical Reassessment of Some Central Components of his Thought, Houndmills, Basingstoke, Hampshire and New York: Palgrave Macmillan. Morillo, J.D. (2001) Uneasy Feelings: Literature, the Passions, and Class from Neoclassicism to Romanticism, New York: AMS Press. Motooka, W. (1998) The Age of Reasons: Quixotism, Sentimentalism and Political Economy in Eighteenth-Century Britain, London and New York: Routledge. Mossetto, G. (1993) Aesthetics and Economics, Dordrecht, Boston, MA, and London: Kluwer Academic Publishers. Mullan, J. (1987) ‘The language of sentiment: Hume, Smith, and Henry Mackenzie’, in History of Scottish Literature, vol. 2, 1660–1800, A. Hook (ed.), Aberdeen: Aberdeen University Press, pp. 273–89. –––– (1988) Sentiment and Sociability: The Language of Feeling in the Eighteenth Century, Oxford: Clarendon Press. Nelson, J.A. (2002) ‘Feminism and the economics of deception: an examination of Adam Smith’s ‘spirit of system’, in Exchange and Deception: A Feminist Perspective, C. Gerschlager and M. Mokre (eds), Boston, MA, Dordrecht, and London: Kluwer Academic Publishers, pp. 43–54.

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Nussbaum, M.C. (1990) Love’s Knowledge: Essays on Philosophy and Literature, New York and Oxford: Oxford University Press. –––– (1995) Poetic Justice: the Literary Imagination and Public Life, Boston, MA: Beacon Press. Nyland, C. (2003). ‘Adam Smith, stage theory and the status of women’, in The Status of Women in Classical Economic Thought, R. Dimand and C. Nyland (eds), Cheltenham and Northampton, MA: Edward Elgar, pp. 86–107. Okochi, S. (2000) ‘Governing imagination: the aesthetic moment in the works of Hume, Adam Smith, and Burke’, Poetica: An International Journal of LinguisticLiterary Studies, 53: 65–81. Otteson, J.R. (2002a) ‘Adam Smith’s first market: the development of language’, History of Philosophy Quarterly, 19: 65–86. –––– (2002b) Adam Smith’s Marketplace of Life, Cambridge: Cambridge University Press. Pack, S.J. (1991) Capitalism as a Moral System: Adam Smith’s Critique of the Free Market Economy, Aldershot, Hants and Brookfield, VT: Edward Elgar. –––– (2001) ‘Unpacking “Adam Smith: critical theorist?”’, in Research in the History of Economic Thought and Methodology, vol. 19–A: 33–46, W.J. Samuels and J.E. Biddle (eds), Amsterdam: Elsevier Science, JAI. Peil, J. (1999) Adam Smith and Economic Science: A Methodological Reinterpretation, Cheltenham and Northhampton, MA: Edward Elgar; revised edition in English of Peil (1995) Adam Smith en de economische wetenschap: een methodologische herinterpretatie, Tilburg: Tilburg University Press. –––– (2000) ‘Deconstructing the canonical view on Adam Smith: a new look at the principles of economics’, in The Canon in the History of Economics: Critical Essays, M. Psalidopoulos (ed.), London and New York: Routledge, pp. 68–91. Phillips, M.S. (1996) ‘Reconsiderations on history and antiquarianism: Arnaldo Momigliano and the historiography of eighteenth-century Britain’, Journal of the History of Ideas, 57: 297–316. –––– (2000) Society and Sentiment: Genres of Historical Writing in Britain, 1740–1820, Princeton: Princeton University Press. Phillipson, N. (1974) ‘Culture and society in the 18th century province: the case of Edinburgh and the Scottish Enlightenment’, in Europe, Scotland, and the United States from the 16th to the 20th Century, vol. 2 of The University in Society, L. Stone (ed.), Princeton, NJ: Princeton University Press, pp. 407–48. –––– (1981) ‘The Scottish Enlightenment’, in The Enlightenment in National Context, R. Porter and M. Teich (eds), Cambridge: Cambridge University Press, pp. 19–40. –––– (1983) ‘Adam Smith as civic moralist’, in Wealth and Virtue: The Shaping of Political Economy in the Scottish Enlightenment, I. Hont and M. Ignatieff (eds), Cambridge: Cambridge University Press, pp. 179–202. –––– (2000) ‘Language, sociability, and history: some reflections on the foundations of Adam Smith’s science of man’, in Economy, Polity, and Society: British Intellectual History 1750–1950, S. Collini, R. Whatmore and B. Young (eds), Cambridge: Cambridge University Press, pp. 70–84. Pittock, J.H. (1997) ‘The Scottish Enlightenment’, in The Eighteenth Century, H.B. Nisbet and C. Rawson (eds), vol. 4 of The Cambridge History of Literary Criticism, Cambridge: Cambridge University Press, pp. 546–59. Plank, F. (1992) ‘Adam Smith: grammatical economist’, in Adam Smith Reviewed, P. Jones and A.S. Skinner (eds), Edinburgh: Edinburgh University Press, pp. 21–55.

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Pocock, J.G.A. (1985) Virtue, Commerce, and History: Essays on Political Thought and History, Chiefly in the Eighteenth Century, Cambridge: Cambridge University Press. Poovey, M. (1994) ‘Aesthetics and political economy in the eighteenth century: the place of gender in the social constitution of knowledge’, in Aesthetics and Ideology, G. Levine (ed.), New Brunswick, NJ: Rutgers University Press, pp. 79–105. Raphael, D.D. (1975) ‘The impartial spectator’, in Essays on Adam Smith, A.S. Skinner and T. Wilson (eds), Oxford: Clarendon Press, pp. 83–99. Raphael, D.D. and Macfie, A.L. (1976) ‘Introduction’, in A. Smith, The Theory of Moral Sentiments, D.D. Raphael and A.L. Macfie (eds), Oxford: Oxford University Press; reprinted, Liberty Press (1982), pp. 1–52. Rashid, S. (1982) ‘Adam Smith’s rise to fame: a reexamination of the evidence’, The Eighteenth Century: Theory and Interpretation, 23: 64–85. Rendall, J. (1987) ‘Virtue and commerce: women in the making of Adam Smith’s political economy’, in Women in Western Political Philosophy: Kant to Nietzsche, E. Kennedy and S. Mendus (eds), Brighton, Sussex: Wheatsheaf Books, pp. 44–77. Rosenblatt, H. (2002) ‘Reinterpreting Adolphe: the sexual politics of Benjamin Constant’, Historical Reflections/Réflexions historiques, 28: 341–60. Ross, I.S. (1995a) The Life of Adam Smith, Oxford: Clarendon Press. –––– (1995b) ‘Adam Smith’s “happiest” years as a Glasgow professor’, in The Glasgow Enlightenment, A. Hook and R.B. Sher (eds), East Lothian, Scotland: Tuckwell Press in association with the Eighteenth-Century Scottish Studies Society, pp. 73–94. Shapiro, M.J. (2002) Reading ‘Adam Smith’: Desire, History, and Value, new edn [1st edn 1993], Lanham, CO, New York and Oxford: Rowman & Littlefield, Modernity and Political Thought Series. Shell, M. (1976) ‘The golden fleece and the voice of the shuttle: economy in literary theory’, The Georgia Review, 30: 406–29. –––– (1978) The Economy of Literature, Baltimore, MA: Johns Hopkins University Press. Sher, R.B. and Hook, A. (1995) ‘Introduction: Glasgow and the Enlightenment’, in The Glasgow Enlightenment, A. Hook and R.B. Sher (eds), East Lothian, Scotland: Tuckwell Press in association with the Eighteenth-Century Scottish Studies Society, pp. 1–17. Skinner, A.S. (1983) ‘Adam Smith: rhetoric and the communication of ideas’, in Methodological Controversy in Economics: Historical Essays in Honor of T.W. Hutchison, A.W. Coats (ed.), Greenwich, CT, and London, England: JAI Press, Political Economy and Public Policy, vol. 2, pp. 71–88. –––– (1996) ‘Language, rhetoric, and the communication of ideas’, in A System of Social Science: Papers Relating to Adam Smith, 2nd edn, Oxford: Clarendon Press, pp. 7–24. –––– (2003) ‘Economic Theory’, in Cambridge Companion to the Scottish Enlightenment, A. Broadie (ed.), Cambridge: Cambridge University Press, pp. 178–204. Skinner, G. (1999) Sensibility and Economics in the Novel, 1740–1800: The Price of a Tear, Houndsmills, Basingstoke, Hampshire and London: Macmillan; New York: St. Martin’s Press. Smith, A. (1976a) The Theory of Moral Sentiments, D.D. Raphael and A.L. Macfie (eds), Oxford: Clarendon Press; reprinted, Liberty Press (1982).

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–––– (1976b) An Inquiry into the Nature and Causes of the Wealth of Nations, R.H. Campbell and A.S. Skinner (eds), Oxford: Clarendon Press; reprinted, Liberty Press (1981). –––– (1978) Lectures on Jurisprudency, R.L. Meek, D.D. Raphael, and P.G. Stein (eds), Oxford: Clarendon Press; reprinted, Indianapolis, IN: Liberty Press (1983). –––– (1980) Essays on Philosophical Subjects, W.P.D. Wightman, J.C. Bryce, and I.S. Ross (eds), Oxford: Clarendon Press; reprinted, Liberty Press (1982). –––– (1983) Lectures on Rhetoric and Belles Lettres, J.C. Bryce (ed.), Oxford: Clarendon Press; reprinted, Liberty Press (1985). –––– (1998) [1993] An Inquiry into the Nature and Causes of the Wealth of Nations: A Selected Edition, K. Sutherland (ed.), Oxford and New York: Oxford University Press, Oxford World’s Classics. Streminger, G. (1995) Der natürliche Lauf der Dinge: Essays zu Adam Smith und David Hume, Marburg: Metropolis. Sutherland, K. (1987) ‘Fictional economies: Adam Smith, Walter Scott and the nineteenth-century novel’, English Literary History, 54: 97–127. –––– (1995) ‘Adam Smith’s master narrative: women and the Wealth of Nations’, in Adam Smith’s ‘Wealth of Nations’: New Interdisciplinary Essays, S. Copley and K. Sutherland (eds), Manchester and New York: Manchester University Press, Texts in Culture, pp. 97–121. –––– (1998) [1993] ‘Introduction’, in A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations: A Selected Edition, K. Sutherland (ed.), Oxford and New York: Oxford University Press, Oxford World’s Classics, pp. ix–xiv. Teichgraeber, R., III (1981) ‘Rethinking Das Adam Smith Problem’, Journal of British Studies, 20: 106–23. Terry, R. (1997) ‘Literature, aesthetics, and canonicity in the eighteenth century’, Eighteenth-Century Life, 21: 80–101. Thompson, J. (1996) Models of Value: Eighteenth-Century Political Economy and the Novel, Durham and London: Duke University Press. Todorov, T. (1996) ‘Living alone together’, New Literary History, 27: 1–14. Tribe, K. (1978) Land, Labour and Economic Discourse, London: Routledge & Kegan Paul. –––– (1999) ‘Adam Smith: critical theorist?’ Journal of Economic Literature, 37: 609–32. Valihora, K. (2001) ‘The judgement of judgement: Adam Smith’s The Theory of Moral Sentiments’, British Journal of Aesthetics, 41: 138–61. Viswanathan, G. (1989) Masks of Conquest: Literary Study and British Rule in India, New York: Columbia University Press. Vivenza, G. (2001) Adam Smith and the Classics: the Classical Heritage in Adam Smith’s Thought, trans. C. Cheesman, and N. Gelder, Oxford and New York: Oxford University Press; translation of Vivenza (1984) Adam Smith e la cultura classica, Pisa: Il Pensiero Economico Moderno. Weinstein, J.R. (2001) On Adam Smith, Belmont, CA: Wadsworth, Wadsworth Philosophers Series. Wesling, D. (1998) ‘Moral sentiment from Adam Smith to Robert Burns’, in Studies in Scottish Literature, 30: 147–55, G.R. Roy (ed.). West, E.G. (1996) ‘Adam Smith on the cultural effects of specialization: splenetics versus economics’, History of Political Economy, 28: 83–105. Woodmansee, M. and Osteen, M. (eds) (1999) The New Economic Criticism: Studies at the Intersection of Literature and Economics, London and New York: Routledge.

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Comments and debate

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On the incompleteness of Adam Smith’s system Charles L. Griswold Jr

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Adam Smith aspired to be a systematic thinker, and to a large extent realized his goals. By his own account, however, he never fulfilled his dream of a comprehensive system, though to the end (in the Advertisement to the sixth edition of The Theory of Moral Sentiments (TMS), 1790) he entertained the hope of completing the ‘long projected theory of jurisprudence’. As Ian Ross notes in his ‘“Great works upon the anvil” in 1785: Adam Smith’s projected corpus of philosophy’ (Ross 2004), other branches of the corpus too remained unfinished. Speculations as to the cause of Smith’s inability to finish his system range from his absorption in other tasks, to the onset of old age, to the impossibility of completing the system in the terms in which he finished it. As every student of Smith knows, he had the manuscripts of incomplete works, including presumably that on jurisprudence, consigned to the flames shortly before his death. With respect in particular to the theory of jurisprudence – itself of course a crucial branch of moral philosophy, for Smith – I have offered the suggestion that one of its fundamental aims was not completed because it could not be completed given the premises of the rest of his system (Griswold 1999, ch. 6.5). Other explanations may bear on the incompleteness of other aspects of the system (no one explanation, in other words, may suffice across the board). The fundamental aim I had in mind is articulated by Smith in several places (these are not here cited in full by Ross). Smith claimed in 1759, and reiterated in the final edition of TMS, his aim to produce a ‘system of natural jurisprudence’ as part of an: account of the general principles of law and government, and of the different revolutions they have undergone in the different ages and periods of society, not only in what concerns justice, but in what concerns police, revenue, and arms, and whatever else is the object of law. (TMS VII.iv.36–7)

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This project comes to an account of the ‘natural rules of justice’ or the ‘theory of the general principles which ought to run through and be the foundation of the laws of all nations’ (TMS VII.iv.37). They are contrasted with all ‘systems of positive law’, which of course vary in time and from place to place. There is every reason to think that the TMS’ ‘natural rules’ and ‘general principles’ are to be identified with what Wealth of Nations (WN) calls the ‘general principles which are always the same’ which ought to govern the deliberations of the ‘science of a legislator’. That science is contrasted with the ‘skill of that insidious and crafty animal, vulgarly called a statesman or politician, whose councils are directed by the momentary fluctuations of affairs’ (WN IV.ii.39). Further, as Ross notes, ‘Smith’s third freelance course at Edinburgh was devoted to a “philosophical history” of civil law or, more broadly, natural jurisprudence, “that science which inquires into the general principles which ought to be the foundation of the laws of all nations” (LJB 1)’ (Ross 2004: 51). So from beginning to end of Smith’s career, and across his published work and some of the unpublished lectures, we find the very same aspiration enunciated. Ross seems to agree with my identification of the ‘general principles of law and government’, the ‘general principles which are always the same’, and the ‘science’ referred to in the WN and LJ passages just cited. However natural the aspiration to such an account may be – Plato would have denominated it eros, the natural and deeply human urge to transcend the bonds of time and place – Smith’s sceptical metaphilosophy ultimately does not entitle him to it. This is the contention that Ian Ross rejects in the paper under discussion. Our difference of opinion is set out within the context of agreement – broader than might first appear from Ross’s essay – about Smith. Appreciating it is important to my critique of Ross’s critique of my view, as will become apparent. We agree on what the projected corpus would have looked like, that is, we agree on its projected structure and on what is missing. As just noted, we agree on the identification of Smith’s several formulations of the normative ‘principles’ the legislator is supposed to appeal to (and which the philosopher is to articulate systematically). Crucially, I am in complete agreement that the dilemmas of modernity are acute – Ross provides a compelling synopsis of some of them – and that Smith has absolutely crucial contributions to make to our understanding and response to them. The Introduction of Adam Smith and the Virtues of Enlightenment insisted on these very points, arguing that they provide a rationale for writing such a book. Ross seems to believe that these points are incompatible with the thesis that one of Smith’s fundamental ambitions with respect to natural jurisprudence could not be fulfilled, and that is why he rejects my suggestion about the reason for which Smith did not finish this part of the corpus. Ross comments that:

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Griswold’s notion of Smith as a failed Platonist, and Cremaschi’s, that he was silenced by an aporia or cognitive perplexity, undercut a submission that he speaks to the world predicament of affluent Westerners enjoying relative health and luxury, while there are many desperately poor and hungry people, subject to chronic sickness. William Rees and Mathis Wackernagel have estimated we would need 3.2 Planet Earths (1996: 12–15), if globally all were to enjoy the living standards of average North Americans. (Ross 2004: 56) I respond that the inference drawn in the first sentence does not at all follow, any more than it follows from the agreed-upon fact that (for whatever reason) Smith failed to finish fundamental parts of his projected system. That a thinker should have been unable, including for theoretical reasons, to complete his or her system in the terms envisioned, does not mean that what was completed is thereby useless. Were the contrary the case, everything that has ever been written in philosophy would arguably lose all relevance. A few lines before the just-quoted passage, Ross notes that: Smith ordered his executors, Black and Hutton, to burn the manuscripts of his incomplete great works (Stewart, ‘Account’ V.8), to our great loss, because he was a perfectionist about composition, not because he had experienced cognitive perplexity in his thinking. There is not a shred of biographical evidence for this claim. (Ross 2004: 56)

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Ross adduces Smith’s perfectionism and old age as his explanations for the incompleteness of the system. I do not find them to be a sufficient, for two reasons. First, Smith’s perfectionism, his busy life, and the onset of old age, did not prevent him from publishing two works and continually revising them to the end of his life. Differently put, he was prepared to publish what he must have known were not perfected works, as the ‘Advertisement’ to TMS clearly implies. Why then could he not do this with respect to the natural jurisprudence, which he evidently had drafted, and had certainly given an immense amount of thought to? Further, Ross does not account for Smith’s own wording of his selfimposed aim. It is that wording which led to my speculation about his inability, for conceptual reasons, to complete this part of his project. Smith sought, as already mentioned, to articulate principles of justice which are everywhere and ‘always the same’. We ought not shirk the fact that ‘always the same’ can only mean: ahistorical, outside of time. It is not a question of my notion of Smith as a ‘failed Platonist;’ but of Smith’s own ‘Platonic’ aspirations as he himself articulates them in the passages cited.

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Nothing Ross says about Smith’s aims in his jurisprudence, philosophy of science, or other parts of the system, in any way remove the difficulty Smith’s words create, for none of those systematic aims as Ross summarizes them aspire to account for unchanging principles. Certainly the Humean background to Smith’s ‘Newtonian’ ambitions does not commit him to the project to which the troublesome words commit. For a Humean, everything must be – in theory – revisable in light of further ‘experimental’ evidence, even a view of the ‘principles of human nature’ we thus far find enormously persuasive. Smith’s famous aside that even the principles of Newton’s system, compelling as they now seem to be, will likely be revised, is very much in this spirit. Ross notes that Smith: identifies Newton’s theory like the others he has discussed, in the fashion of someone instructed by the sceptical Hume, as ‘mere inventions of the imagination’ (‘Astronomy’ IV.76). Smith’s claim, therefore, is that theories are to be judged on the basis of their power to soothe the imagination, achieve coherence and enhance our response to the objects they cover. He considers this is the clue that guides us through the ‘labyrinths of philosophical history’ (II.12). (Ross 2004: 51) I agree entirely, and will return to the point in a moment. Why is the aspiration to give an account of ‘unchanging’ principles troublesome? I argued in my book – and everything else Ross says in his essay confirms this – that the impartial spectator is the ultimate source of normativity for Smith. The impartial spectator does not look to forever selfstanding, mind-independent, timeless norms, and then apply them; rather, the impartial spectator is the ultimate source of those norms themselves. The ‘natural’ is, in moral philosophy, determined by the impartial spectator’s judgment. Taken together with other considerations about the scope of ‘theory’, this can only mean that in the final analysis, neither judgment nor philosophy may escape from time. As I noted in the final section of Chapter 6 of my book, the problem is obvious: how can history yield general normative principles that are everywhere and always the same? Is not the process either circular or inherently impossible? Qua system, the principles of natural jurisprudence would have to be complete, and for Smith it is the natural urge of the imagination to create such completeness. But as dependent on the experiential or historical, the system would have to be open-ended. Even the exact mix between the systematic and the openended would vary, perhaps, from one period to the next, such that we could not as theoreticians state the ideal ‘formula’ for combining the two. Thus the philosopher must rely on the historians, rhetoricians, and literary authors of all sorts, for information about the context. They, in turn, need philosophers in order to formulate in a satisfactory way the principles suggested

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by the context, or the principles they assume in interpreting the context, or even why there is a need for formulating principles at all. Ultimately, Smith faced the task – which some before him and many since have also faced – of attempting to carve out logical space for reasongiving that is neither free from historicity nor reducible to it. The sphere of justice is a crucible for any such theory, given our theoretical as well as practical proclivity to enunciate our fundamental normative principles (such as, say, the principle of the equal dignity and moral worth of the human being) as unchanging and everywhere the same.1 Smith’s own words about the foundation of natural jurisprudence, and their tension with other parts of his system, constitute the ‘shred of evidence’ for what is admittedly a speculation about the incompleteness of this part of his system.2 Could Smith have dropped his ‘Platonic’ aspirations, along with the offending words, and worked out the fundamental principles of the ‘philosophical history’ of which he spoke, one which would seem much more in line with his other systematic aims and achievements? Everything indicates that Smith was heading in that direction – everything, that is, but his ‘Platonic’ remarks. I do not disagree with Ross that ‘there seems no reason in principle’ why Smith could not have extended the ‘conceptual themes and procedures’ that are found in Smith’s ‘“philosophical histories” of science or, at least astronomy and ancient physics, morals, also economics’ to law and government (though it is a separate question as to how successful the results would be) (Ross 2004: 49). However, Smith’s language, quoted at the start of the present essay, indicates that he had not quite taken that step. Had Smith put himself in the position of offering asides about the theory of jurisprudence analogous to that (already cited above) about the destiny of Newton’s seemingly ‘final’ system – namely, that it is destined to be revised – some interesting self-reflexive questions would have arisen. For the comments about the inevitable revisability of systems of explanation would apply to his own too. This would mean that his famous axioms about the ‘obvious and simple system of natural liberty’ (WN IV.ix.51), the principles of ‘perfect liberty and perfect justice’ (WN IV.ix.28), to take just two examples, would be explicitly recognized as in some sense provisional. Did Smith really think of them as such? Could he afford to advocate for them while also commenting sceptically about their lasting value? The reflexive problem cuts still deeper, of course. For the sceptical foundations (if I may so put it) of the system itself – the theoretical framework according to which there is no ‘final’ system in any sphere, the framework according to which ‘philosophical history’ is the right method – is presumably itself revisable. Else it would have to be, problematically, an exception to its own dogma. The deep issues here are long-standing ones in philosophy, and Smith surely grasped them, if only from Hume’s complex struggles with self-reflexive or metaphilosophical issues. To say

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that he might have found these issues difficult to resolve to his own satisfaction, in a way that stymied his aspiration to bring closure to the system as he consistently envisioned it, is entirely compatible with our celebration of Smith’s invaluable contributions.

Acknowledgements I am very grateful to Ian Ross for his thoughtful response to my book, and to Vivienne Brown for organizing this exchange in the pages of The Adam Smith Review. Let me also record that I found Ross’ comments about Darwin’s appropriation of Smith fascinating; there is clearly a very important paper to write on the subject!

Notes 1 2

I have explored the problem of the ‘historicity’ of the impartial spectator, and the problem as to whether differently located impartial spectators would arrive at different judgments, in Griswold (2005). Ross claims that I am ‘particularly impressed by Cremaschi’s argument (1989) that there is a deep aporia in Smith’s epistemology and politics’ (Ross 2004: 44). Actually, I simply cited Cremaschi’s point (Griswold 1999: 31, n. 48), without recording any particular enthusiasm for his formulation.

Bibliography Cremaschi, S.V. (1989) ‘Adam Smith, sceptical Newtonianism, disenchanted republicanism, and the birth of social science’, in Knowledge and Politics: Case Studies on the Relationship between Epistemology and Political Philosophy, M. Dascal and O. Gruengard (eds), Boulder, Colorado: Westview Press. Griswold, C.L. (1999) Adam Smith and the Virtues of Enlightenment, Cambridge: Cambridge University Press. –––– (2005) ‘Fair Play, Übelnehmen und der Sinn für Gerechtigkeit: Kritische Überlegungen zu Adam Smith’, in Adam Smith als Moralphilosoph, C. Fricke and H.-P. Schütt (eds), Berlin: de Gruyter, pp. 128–59. ––––Rees, W. and Wackernagel, M. (1996) Our Ecological Footprint: Reducing Human Impact, New York: Wiley. Ross, I.S. (2004) ‘ “Great works upon the anvil” in 1785: Adam Smith’s projected corpus of philosophy’, The Adam Smith Review, 1: 40–59, V. Brown (ed.), London and New York: Routledge.

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Reply to Charles Griswold ‘On the incompleteness of Adam Smith’s system’ Ian Simpson Ross

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Charles Griswold has replied in vigorous but courteous terms to my paper on the ‘great works’ Adam Smith had in hand in 1785 (Griswold 2006, Ross 2004). I fear I went too far in asserting that his interpretation, at one point, of Smith as some kind of ‘failed Platonist’ undercuts the argument that Smith teaches us how to reason morally about our advanced world predicament of creating wealth and living in a world of want. My assertion was too sweeping, and I should stress far more that I am Griswold’s ally in seeking a better understanding of Smith as a moralist, and advocating that we should attend to his message in our era. My aim was to take issue with the argument (Griswold 1999, ch. 6.5), that one of the works that Smith did not live to complete, or part of one them, a ‘long projected theory of jurisprudence’, could not be completed ‘given the premises of the rest of [Smith’s] system’. We are agreed that this theory of jurisprudence would present an account of the ‘rules of natural justice’ or the ‘theory of the general principles which ought to run through and be the foundation of the laws of all nations’ (TMS VII.iv.36, 37). This statement is found at the conclusion of all editions of The Theory of Moral Sentiments from the first, 1759, to the last one corrected by the author: sixth, 1790. Shifting his ground somewhat in his reply to me, Griswold draws attention to Smith’s formulation in Wealth of Nations of these ‘general principles which are always the same’ (IV.ii.39), and ought to prevail when a legislator practises his ‘science,’ as opposed to the ‘skill’ applied by ‘that insidious and crafty animal, vulgarly called a statesman or politician’, responding to the ‘momentary fluctuations of affairs’. I contend that this is not a methodological declaration so much as a tactical move on Smith’s part in the discourse of WN to elevate enlightened future legislators, his hoped-for audience, over those presently in charge of public policy maintaining the edifice of unnecessary economic restraints and preferences.

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Griswold’s argument in his reply, however, asserts that ‘we ought not shirk the fact that “always the same” [with respect to general rules of justice] can only mean: ahistorical, outside of time’, and he interprets this to mean that Smith had ‘Platonic aspirations’ which he could not fulfil (Griswold 2006: 183). My contention is that this paints Smith as a ‘failed Platonist,’ and does not do due justice to Smith’s careful avoidance in TMS of the Platonic concept of the timeless Idea of Justice, which transcendent reason alone can grasp. Smith’s critical evaluation of Platonism as a philosophy is to be found in the ‘The History of Ancient Logics and Metaphysics’, first published in the posthumous Essays on Philosophical Subjects (EPS) (1795), in which he observes, ‘Mankind have had, at all times, a strong propensity to realize their own abstractions’, one example being the ‘ill-grounded foundation of those Ideas, or Universals, of Plato and Timaeus’, originating ‘more from the nature of language, than from the nature of things’ (EPS 1980: 125). The concluding two paragraphs of TMS sketch in brief Smith’s ‘account of the general principles of law and government, and of the different revolutions which they had undergone in the different ages and periods of society’, but excluding ‘what concerns police, revenue, and arms’, namely the subject matter of WN. I am quoting, of course, from the Advertisement to the 1790 edition of TMS. Smith takes an anthropological approach. At the end of TMS, Smith assumes a degree of uniformity of human nature notable for including ‘natural sentiments of justice’. Humans will not submit to injustice from each other, and as societies become organized, they empower magistrates to call on community strength to enforce acting justly, which comes down to refraining from harming each other (the ‘practice’ of the virtue of justice). To prevent the chaos that would ensue if everyone sought his own private justice, in the sense of revenge for injury, wherever governments possess authority, they appoint judges who agree to provide justice across the board, and promise to hear and redress all complaints of those who protest they have been injured. Further, wherever good government is upheld, not only are judges appointed to resolve conflicts, but rules are prescribed to order and systematize the decisions of these judges: ‘these rules are, in general, intended to coincide with those of natural justice’, that is, what the ‘natural sentiments of justice’ would prescribe. Many things prevent the desired coincidence. Where people are rude and barbarous, the ‘natural sentiments of justice’ do not ‘arrive’ at the point of ‘accuracy and precision’ attained in ‘more civilized nations’. Sometimes, the interest of the state as vested in a constitution warps the laws of a country from what natural justice would prescribe. Sparta as a military state might provide an example of this. Sometimes, this warping is the outcome of the tyranny exerted over government by a particular order, or we would say class, of citizens, as in the case of the Athenian oligarchy. Smith’s reading of history is that systems of positive law wherever they are found record the sentiments of humanity

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regarding justice at different periods and in different nations, but they cannot be pronounced ‘accurate systems of the rules of natural justice’ (para. 36). What can we take from all this – an ever-receding mirage of such rules? I think not, rather, in terms of the evolved Roman Law tradition of Scotland, such as we find in Stair’s Institutions (2nd edn 1693) or the common law of England, as represented by Blackstone’s Commentaries (1765), Smith seems to envisage emergence of general rules of law from the endless process of refinement of particular laws through the interaction of the adversarial process at the Bar; maturing deliberation on the Bench; the close focus on verdicts of guilt and reparation by juries representing the public; and research, debate, and closure in the legislature on fundamental issues of civil and criminal jurisdiction. Each general rule of law is to be tested at every turn by a question for the individual and the society: do we feel this example to be just? When the answer is in the negative, then we must struggle on until there is belief that justice has been served through the emergence of a rule of law than be applied across the board. At TMS VII.iv.37 Smith observes that it was ‘very late in the world’ before a ‘general system’ of justice was thought of, and he considers that the classical writers Plato and Cicero, who might have been expected to produce an ‘enumeration of those rules of natural equity’, let posterity down. He reckons it was Grotius in 1625 in De Iure Belli ac Pacis (On the Law [and Rights and Wrongs] of War and Peace), who provided something like what is needed. Smith was trained in this tradition – it informs his notion of what natural law is, and ought to be, as the ‘foundation of the laws of all nations’. My point is that the premises of Smith’s ‘theory of . . . Law and Government’, if that ‘great work’ had reached the reading public, would have been on all fours with his ‘theory of moral sentiments’, and those of the theory or ‘system’ of political economy he presented in WN. As well, they would have conformed to the natural law theory of Grotius and Pufendorf, though founded on a ‘sentiment’ of justice found everywhere, at all times, and among all people, rather than a concept of right reason available to evaluate and direct jurisdictions or proto-jurisdictions. As for the history of ‘Law and Government’, my present thinking is that Smith would have offered for Europe and European colonies up to his time, the central features of Pietro Giannone’s Istoria civile del regno di Napoli first published in 1723, and translated into English in 1729–31 by a shadowy Scottish army officer, Captain James Ogilvie. Giannone announces his project as follows:

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We shall relate in a Series of little less than Fifteen Centuries, the various Conditions and Changes of its Civil Government under so many Princes that have govern’d it; and by how many Steps it at last arriv’d to the State in which we see it present; how it vary’d by reason of the

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Gibbon recognized the significance of the Italian tradition of civil history of this kind for investigating the origin, development, decline, and replacement of institutions. He indicated that Scotland in his time had taken over the lead in this field from Italy (Decline and Fall of the Roman Empire, line 7 – vol. 3, p. 1057: ch. lxx, n. 89), and he instanced Hume, Robertson, and Smith as the historians who provided the requisite ‘strong ray of philosophic light’ (Gibbon, line 9 – vol. 3, p. 728: ch. lxi, n. 69). Smith wrote to the Duc de La Rochefoucauld on 1 November 1785 that he had collected the materials of his book on ‘Law and Government’ in a ‘great measure’, and ‘some Part’ of it was ‘put into tollerable good order’. His problem, he acknowledged, was the ‘indolence of old age’, which he felt coming upon him fast, though he struggled ‘violently against it’ (Corr. Letter 248). I think we should take him at his word rather than speculate about an aporia in his thought, or invoke a problem with a Platonic formulation, which he eschewed. That said, I affirm that Griswold’s Adam Smith and the Virtues of Enlightenment remains still the most helpful guide I have encountered to the philosophic strengths of TMS. As an afterthought, I wish to mention two statements in Dugald Stewart’s ‘Account of the Life and Writings of Adam Smith’ (1980) which I neglected in my paper, but which have a bearing on whether Smith could or could not have completed the ‘great works’ he projected in 1785. One seems to support the position that the ‘Philosophical History of all the different branches of Literature’ could not have been completed. Stewart wrote in a P.S. placed at the end of his Notes to the Account, that he was informed by Joseph Black and James Hutton, editors of the Essays on Philosophical Subjects, after this book was published in 1795, that Smith ‘had long abandoned [the plan for the aforementioned Philosophical History] as far too extensive; and these parts of it [published in EPS] lay beside him neglected till his death’ (Stewart 1980: 350). I will observe that only five years intervened between Smith’s death in 1790 and his assertion in 1785, about the ‘materials’ for this ‘Philosophical History’ being ‘in a great measure collected’, with ‘some Part’ being in ‘tollerable good order’ (Corr. Letter 248). I think this can hardly be described as a lengthy interval, and it would appear that what Stewart reports is the EPS editors’ appraisal of Smith’s plan. As for the ‘theory and History of Law

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and Government,’ which Charles Griswold and others think could not have been completed, Stewart takes quite a different view: The principal materials of the works which he had announced [e.g. in the TMS Advertisement], had been long ago collected; and little probably was wanting, but a few years of health and retirement, to bestow on them that systematical arrangement in which he delighted; and the ornaments of that flowing, and apparently artless style, which he had studiously cultivated, but which, after all his experience in composition, he adjusted, with extreme difficulty, to his own taste. (Stewart 1980: 326)

Bibliography Giannone, P. (1729–31) The Civil History of the Kingdom of Naples, trans. Captain James Ogilvie, London; first published (1723) Istoria civile del regno di Napoli, Naples. Gibbon, E. (1996) The History of the Decline and Fall of the Roman Empire, 3 vols, D. Womersley (ed.), London: Allen Lane, The Penguin Press. Griswold, C.L. (2006) ‘On the incompleteness of Adam Smith’s system, The Adam Smith Review, 2: 181–86, V. Brown (ed.), London and New York: Routledge. –––– (1999) Adam Smith and the Virtues of Enlightenment, Cambridge: Cambridge University Press. Ross, I.S. (2004) ‘ “Great works upon the anvil” in 1785: Adam Smith’s projected corpus of philosophy’, The Adam Smith Review, 1: 40–59, V. Brown (ed.), London and New York: Routledge. Smith, A. (1980 [1795]) ‘The History of Ancient Logics and Metaphysics’, in Essays on Philosophical Subjects, W.P.D. Wightman and J.C. Bryce (eds), Oxford: Clarendon Press. –––– (1987) Correspondence of Adam Smith, E.C. Mossner and I.S. Ross (eds), Oxford: Clarendon Press. Stewart, D. (1980) ‘Account of the Life and Writings of Adam Smith, LL.D.’, I.S. Ross (ed.), in Adam Smith, Essays on Philosophical Subjects, W.P.D. Wightman and J.C. Bryce (eds), Oxford: Clarendon Press.

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Is life a marketplace? Symposium on James R. Otteson’s Adam Smith’s Marketplace of Life

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This symposium is representative of a new, multidisciplinary, wave of interest in Adam Smith in recent years. What makes it unique is that all of us, except one, began our courtship with Smith as graduate students at the University of Chicago in the 1990s: James Otteson (who finished earlier than the rest of us) in Philosophy; Lauren Brubaker in the Committee on Social Thought; Eric Schliesser in Philosophy; and me in Political Science. (Maria Pia Paganelli studied economics at George Mason – but she is patently more ‘Chicago’ than we are!) It has never been clear to me why so many of us (and others) gravitated toward Smith during those years. We were in different departments with different interests, worked in different traditions with predominantly different faculty (few of whom had direct interests in Smith; none of whom were Smith scholars per se). Surely some of us were attempting to wrestle Smith from what the ‘Chicago school’ had made of him. But whatever the reason, Chicago was vibrating with Smithiana throughout the 1990s: it had become once again an exciting place to think and write about Adam Smith. It was a pleasure to recapture some of that energy last August when we gathered at UCLA at the International Conference for EighteenthCentury Studies to discuss Jim Otteson’s new book, Adam Smith’s Marketplace of Life (2002) (ASML). Named an ‘Outstanding Academic Title in 2003’ by Choice magazine (published by the American Library Association), ASML challenges decades of scholarship that had convinced itself that the ‘Adam Smith Problem’(ASP) was confused, putatively artificial, and essentially a dead matter. Otteson insists that the ASP is not quite dead since ‘its most potent formulation is not resolved by standard contemporary responses’ (p. 136).1 He resuscitates the ASP in order to kill it anew with a provocative argument about continuity: that for Smith, our moral and economic lives are governed in parallel ways by a ‘market model’ that he first developed in The Theory of Moral Sentiments (TMS) and carried through to the Wealth of Nations (WN) – ultimately that the The Adam Smith Review, 2: 195–222 © 2006 The International Adam Smith Society, ISSN 1743–5285, ISBN 13: 978–0–415–39460–4

196 Fonna Forman-Barzilai mechanisms that ‘unintentionally’ produce economic stability and prosperity mirror the mechanisms through which communities ‘unintentionally’ produce languages and ordinary moralities. For Otteson, moral and economic marketplaces are ‘analogous’ in that they ‘develop, change, and are sustained by the interactions and mutual exchanges of information among the people of the relevant communities as they strive to satisfy their interests in cooperation with one an other’ (p. 6). Note the novelty of Otteson’s approach: he emphasizes self-interest without textually prioritizing WN, diminishing TMS, or reading WN back into TMS, as other attempts to reconcile the texts have done. Otteson manages to elevate selfinterest conceptually while retaining TMS as the motivating centre of Smith’s thought: ‘The system of morality constitutes for Smith the overarching social order, encompassing and applicable to everything else we do’ (p. 201). Otteson’s resumption of the ASP rouses questions that new generations of Smith scholars (those who might see themselves as ‘beyond the ASP’) are wise to consider afresh. To what extent does a unified vision of human nature run through Smith’s thought, sustaining the various ‘orders’ of human life? Does an argument for consistency require that we prioritize self-interest and gloss what many have perceived as Smith’s far richer account of human motivation? If morality in fact emerges conventionally through our experiences in a marketplace of exchange, as Otteson asserts, to what extent can moral judgment transcend its context and become critical and/or objective?2 Otteson insists it can, but does so by falling back on God’s design. Does Smith cohere then only for believers? Does this make moral standards any more objective? If we read Smith’s description of moral and economic spontaneity normatively, as Otteson advises, does this obviate the need for political and philosophical intention and inventiveness? Did Smith see liberal institutions as self-contained, selfpromoting, and self-correcting as Otteson does? Can we afford to see them this way today? These questions and others motivate the papers in this symposium, affirming that Otteson’s book will be with us for some time.

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Why Adam Smith is neither a conservative nor a libertarian Lauren Brubaker

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Jim Otteson’s new book is a thoughtful and important contribution to the current debate over the interpretation and legacy of Adam Smith. He rightfully reminds us of the importance in Smith’s moral and economic philosophy of spontaneous or, his preferred term, ‘unintended’ order (p. 6). Otteson’s book is distinctive in claiming that for Smith this ‘market model’ is applicable not only, as is usually argued, to economics, but also to the development of languages, morals, and, he suggests but does not claim to prove, perhaps all aspects of human behavior (p. 251). In the important case of morals, conventional moral standards ‘reflect an evolutionary system of order that was unintentionally created’ through average individuals interacting in a ‘marketplace’ of morals, motivated by the ‘desire for mutual sympathy’ (p. 8). Because moral rules are the product of this organic evolution, they ‘embody a wisdom necessarily greater than that of any one individual’ and thus enjoy a ‘presumptive authority’ (pp. 251, 321–2). This unintended wisdom of everyday life is the basis for what Otteson calls Smith’s ‘Burkean conservativism’. The validation of tradition fits well with Smith’s skepticism about politics and his frequent warnings about the dangers of religious and political ‘men of system’ who think their personal wisdom superior to that embodied in custom (The Theory of Moral Sentiments VI.ii.2.7–18; Smith 1976a). Having concluded one century and just begun another in which almost unimaginable humanitarian catastrophes are perpetrated in the name of improving the human situation, we are well advised to take such scepticism seriously. Otteson also reminds us that the ultimate goal for Smith is general happiness, the best means is natural liberty, and thus we have reason to ‘spread human freedom as widely as possible’ (p. 297). On Otteson’s account, natural liberty is possible as a political and moral teaching precisely because Smith has shown that a beneficial unintended order or ‘marketplace model’ is at work across the whole spectrum of ‘human social life generally’ (p. 287). If ‘individuals pursuing their own interests increase every other person’s chances of satisfying his interests’ then there is no reason to restrain pursuit of these interests, and natural liberty leads to general happiness (p. 297). Otteson’s Smith is not just a traditionalist

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but a classic liberal as well, perhaps even a libertarian (although Otteson doesn’t use that term). Smith as the advocate of limited government and liberty, as the defender of free markets and religious tolerance, is a Smith with whom we are quite familiar. This is the Smith who was critical of the reigning orthodoxies in morals, religion and economics, who described his Wealth of Nations as a ‘very violent attack. . . upon the whole commercial system of Great Britain’ (Corr. Letter, p. 208; Smith 1987). But how can Smith be both a Burkean conservative and a radical critic of existing systems in the name of liberty? The traditionalist Smith makes the general claim that whatever exists is beneficial because it is the result of selection by the ‘marketplace’, the natural, unintended evolution of human activity. The liberal Smith is a crusading advocate of a widespread liberty that does not exist anywhere in his world. Liberalism, whether religious, political, or economic, was in the eighteenth century merely a gleam in the eye of a few philosophers and their followers. Nowhere was it the common wisdom of long tradition. (It is an open question whether Burke himself is better understood as a liberal reformer or as a pure traditionalist.) Otteson admits that Smith is aware that occasional clouds may dim his ‘sunny optimism’, that some minor corruption or deviance is possible within the overall framework of the market model and its unintended beneficial outcomes. For example, ‘beneficial progress is often slowed and even temporarily reversed by vested interests, entrenched bureaucracies, or government-business partnerships to plunder some for the sake of others’ (p. 277). Or there may be ‘periodic interruptions of religious or political initiatives, which will slow the progress’ that is otherwise the inevitable course of civilization (p. 302). But for Otteson’s Smith, these are only bumps and turns in a generally smooth and straight road. The clinching argument is that Smith’s ‘ultimate preference for the “obvious and simple system of natural liberty”’ is possible because he believes that ‘human institutions developing according to the market model do in the end progress beneficially, despite the inevitable problems that periodically arise’ (p. 279). Smith’s defense of human freedom is dependent on and the result of his conviction that nature and nature’s God guarantee spontaneous order: that beneficial customs and institutions are the inevitable and humanly unintended consequence of the interaction of human nature and the environment in which we are placed. Smith’s traditionalism is the premise which makes possible Smith’s liberalism. Corruption or deviance are minor and ultimately insignificant obstacles. Otteson has Smith exactly backwards. Smith advocates human freedom precisely because laws and institutions designed with the intention to realize these principles will also promote a moderate and just politics and thus serve human happiness. Such institutions, however, would be a sharp contrast to the overwhelming experience of human history in which liberty and justice have been the rare exception. That they are somewhat more common, though far from universal, since Smith’s time is in considerable

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part the intended consequence of the sustained efforts of Smith and other liberal philosophers. Otteson charges Smith with a ‘serious omission’ in failing to provide an explicit theory of moral deviance, although he thinks one can be constructed that is consistent with the rest of Smith (pp. 12, 303–14). In fact Smith’s account of the history of morals and economics is one long story of ‘deviance’ from Smith’s own liberal principles. It is the story of the restraint on human freedom and happiness due to the failure to develop institutions of free markets, impartial justice and religious liberty. Smith explains this corruption of morals as a consequence of human ambition for wealth and greatness (TMS I.iii.3) and of religious and political ‘faction and fanaticism’ (TMS III.3.41–3). He provides an explanation for this deviance and an argument for the necessity of good philosophy and good legislation to realize the very real benefits of the ‘marketplace’. Smith is primarily a liberal, although his recognition of the dangers of the ‘spirit of system’ makes him a moderate liberal. Thus, while explicitly sympathetic to context and political realities, he cannot be a conservative traditionalist. Ironically for Otteson’s argument, he is too aware of the dangerous appeal of simple systems to ever be a doctrinaire libertarian.

I Economic sentiments Let us briefly consider the ‘obvious and simple system of natural liberty’ (WN IV.ix.51; Smith 1976b). Coming as it does at the end of an extensive critique of the reigning mercantilist orthodoxy, its context alone reminds us that natural liberty hadn’t established itself in Smith’s time and we are hard pressed to find any significant previous period when it had flourished. ‘Deviance’ from natural liberty as the normal condition of human economic life would seem to be more than a ‘periodic interruption’ or temporary reversal that Otteson’s account allows. Smith is not much more sanguine about the future. Earlier in the same book he states that to expect complete freedom of trade in Great Britain ‘is as absurd as to expect that an Oceana or Utopia should ever be established’ (WN IV.ii.43). Are we in a position today to argue otherwise? Things do not look very good for Otteson’s claim about unintentional beneficial order. What poses such an ‘unconquerable’ opposition to free markets? Smith lists two issues: the ‘prejudices of the publick’ and ‘the private interests of many individuals’. We might think today of the prejudices represented by the anti-globalization movement or the furor over genetically modified crops. As for private interests, we need only think of agriculture, textiles, steel. The market depends on the natural desire to better our condition. But as Smith makes clear both here and in numerous other places in WN, this is frequently, even normally, corrupted by prejudice or by self-serving actions that prevent free markets and pervert justice. Left to itself, it is often the cause of combinations that, as Otteson admits, ‘plunder some for the sake of others’ (WN I.xi.p.10). The partially

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free markets that we do see are the result not of unintended consequences, but of pitched political battles, and their continuance always requires constant effort and vigilance. ‘Natural liberty’ is an historically rare political achievement, and until very recently tradition was always an obstacle.

II Moral sentiments Contrary to Otteson’s argument, Smith is acutely aware that our natural moral sentiments, like our various desires to better our condition, do not automatically result in unintended beneficial order. Nature needs the help of good philosophers and legislators to approximate the utopia of impartial justice and eliminate the scourge of factional conflict and religious and political oppression. Smith entirely favors these liberal ends and spent his life promoting them. But for that reason we might wonder whether he really thought they were the natural result of human nature and the default condition of the human race. History records oppression by the stronger, the well born and the wealthy, or of one religion or race by another. It records few instances of regimes that meet the Smithian (and modern liberal) standard of impartial justice and economic, personal and religious liberty. Only where philosophers like Smith or their students have promulgated the doctrine of impartiality, often in the form of natural rights or human rights, and where legislators have created powerful institutions to enforce those rights, have we achieved even the significant but limited success we find in parts of the world today. I hardly need add that this success is still under strenuous attack by partisans of anti-liberal ideologies of various sorts. For Smith it makes all the difference whose sympathy one desires and which spectator’s opinions one chooses to adopt. Otteson is aware of this issue to a certain extent, and in his section on moral deviance he suggests that Smith’s account allows for subgroups that may adopt deviant moral ‘systems’, and explicitly notes in this regard that Smith ‘is aware of religious fanaticism and enthusiasm’. But he criticizes Smith because he ‘gives no explanation for how such fanaticism can arise’ and argues that as regards deviant systems ‘we find in TMS no explicit attempt to account for their presence’ (pp. 306–8). I agree with Otteson that our natural sympathy is for Smith the basis of human sociability and morals. But I argue that for Smith it was as well a major cause of faction, fanaticism and the corruption of morals. The desire for mutual sympathy may lead us out of ourselves and thus to the virtues of benevolence and justice. The desire to receive the sympathy or approval of others, however, leads us to conform to the opinions of others. When the actual spectators and the impartial spectator are in conflict, as is almost always the case when there are divisions or disagreements in society, the desire for sympathy is corrupting. Under most political conditions, then, the natural desire for sympathy leads us to adopt the

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partial opinions of our religious, ethnic, political or economic peers at the expense of impartiality. A similar argument applies to the development of the general rules of morality that should be the result what Otteson calls ‘the impartial spectator procedure’ (pp. 42–64). When we develop general rules from induction based on putting ourselves in the position of another, our rules will be impartial. However, when we adopt general rules based on what is generally ‘approved or disapproved of’, they will only be as impartial as the opinions of our particular society or group. In many cases this provides valuable social agreement on morals, but it is also Smith’s explanation for the stubborn persistence of the various infringements on liberty by one group at the expense of another that characterize so much of human history (TMS III.3.41–3; III.4.8).

III Conclusion

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If this analysis is right, then the desire for mutual sympathy and the standard of the impartial spectator are insufficient to prevent the corruption of morals by economic interest, prejudice, faction and fanaticism. Otteson’s unintended beneficial order faces systematic obstacles grounded in Smithian human nature. Smith himself offers no guarantees, no magic solutions to these age old human problems. His analysis suggests political steps to improve the odds for moderate politics. It makes a huge difference whether our tendency to put ourselves in the place of another and thus to develop an impartial standard of justice is reinforced or undermined by the dominant ideology and by the moral and political leaders of society. If society is arranged such that equality before the law and religious toleration are official dogma, the dangers of faction and fanaticism can be reduced. If the administration of justice is both impartial and connected with economic opportunity and markets, society is likelier to reap the benefits of moderation and opulence. Otteson is correct that the expansion of markets on Smith’s account leads if not to friendship and familiarity, at least to the tendency to put oneself in the place of strangers sufficient to understand what sorts of mutually beneficial commerce are possible. This over time breaks down other kinds of barriers that previously prevented sympathetic identification. Smith the philosopher advocated these opinions and institutions with the conscious intention to promote freedom and happiness. In his efforts to promote religious, economic and political liberty, or in Otteson’s words, to ‘spread human freedom’, Smith may sometimes make liberty appear more automatic, ‘obvious and simple’ than he knew it to be. To this extent he may be taking advantage of something he describes so well: the human propensity to admire simple and beautiful systems (TMS IV.1.11; ‘History of Astronomy’ II.12, IV.19, 35, 76, in Smith 1980). He might even be thought to be such a man of system. But we

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should have sufficient respect for Smith the philosopher to assume that he isn’t blind to his own critique of men of system (TMS VI.ii.2.7–18). We should thus pay close attention to his explicit indications of the natural limits of his own ‘obvious and simple system’. Smith was acutely aware of the problems facing the establishment of impartial justice and religious and economic liberty. This awareness makes it all the more necessary to explain and defend the advantages and to protect the achievements of these where they exist. Otteson and Smith are on the same side here, and that is the side of moderate liberalism. Smith is neither a traditionalist nor a libertarian. Liberalism is not well served by downplaying the difficulty of its realization by an overemphasis on unintended beneficial consequences. Once established, however, the advantage of a traditional prejudice in its favor is not to be lightly dismissed.

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Adam Smith Why decentralized systems? Maria Pia Paganelli

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‘I have never known much good done by those who affected to trade for the public good’ (WN IV.ii.9)

James Otteson’s book (2002) is a comprehensive and clear analysis of Smith’s two works – Wealth of Nations and The Theory of Moral Sentiments – and their relation. Otteson’s detailed analysis shows how, for Smith, market systems and moral systems are similar. Both are generated by individual decisions. And both generate unintended systemic social order. I think Otteson’s analysis is correct. In this paper I develop one possible implication of Otteson’s reading of Smith (that Otteson did not develop) aimed at justifying his Smith’s position (as read by Otteson). Smith describes human beings as imperfect and not perfectible. Given all their biases, delusions and mistakes, how can individuals live together, be virtuous, and prosper? In both TMS and WN, Smith answers that individuals do not know what is best for them and/or for society, but with a decentralized process of trial and error they develop successful rules of behaviour and/or institutions that allow them to achieve their goals as well as, unintentionally, social order. The question this paper asks is: was Smith accurate in describing how, aiming at something other than social order, individual decisions unintentionally and spontaneously generate social order? The answer I offer is yes. Smith’s implicit model of social order works because it focuses on how to minimize the consequences of mistakes and imperfections in society rather than on how to create the best social system.

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I Why decentralized systems are preferred to centralized systems in theory and in practice

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A decentralized system is a system in which there are many autonomous and independent decision centres, as many as the number of individuals (or groups of individuals) present in the system. Individual decision centres choose accordingly to individual costs and benefits. The well-being of the system may not be taken into account individually, and the decision centres

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may not be coordinated. A centralized system is a system in which there is one (or few) decision centre(s), the decisions of which are for the entire system. Borrowing the concept from robust statistics (Mosteller and Tukey 1977), a robust system is a system that minimizes catastrophic results under nonideal conditions, even if it may not be the most efficient system under ideal conditions. It asks the questions: what is the worst that can happen? How is it avoidable? A fragile system is a system that collapses under non-ideal conditions, even if it may be the most efficient system under ideal conditions. It asks: what is the best that can happen? How is it achievable? Decentralized systems tend to be robust. Decentralized systems minimize catastrophic results if there is a mistake, because of their very decentralized nature. Decisions are taken at the individual level, and their consequences remain at the local level. If a decision is incorrect and causes disasters, only the individual decision maker (or maybe his close surroundings) may face the catastrophe, but the rest of the system may remain unaffected. Centralized systems tend to be fragile. With centralized decisions, consequences are global by definition. If an error is made with a centralized decision, the entire system is affected and likely to face disasters. Centralized systems that aim at achieving the best possible outcome expose themselves to catastrophic outcomes in case of mistakes. Smith claims that decisions taken at the individual level – a decentralized system – generate social order both in the economic sphere3 and in the moral sphere. To understand why Smith described a decentralized system as able to generate social order, let us ask ourselves: what is the alternative? The alternative to a decentralized system as described by Smith is a centralized system. Smith does not design the best social order ever, but he describes a social order that is able to cope with human imperfections. The decentralized spontaneous orders he describes are robust systems. Let us apply the two frameworks to analyze social systems.4 Assume angelic selfless, unbiased, and rational men – perfect human beings or at least perfectible. This assumption can be used on two levels. Either all individuals are selfless, unbiased, and rational, or a group of them is. If only a group of individuals is selfless, unbiased, and perfectly rational, or at least more so than the rest of the population, this group should be in charge of leading the rest to perfection. Perfect social harmony is achievable, even if with some effort, under the (central) direction of the privileged group. This is the description (and prescription) of a centralized system. Centralized decisions made by the best individuals to better the conditions of others generate the highest performance for the entire social system, as in model A of Figure 5. On the other hand, if the best group is not in charge of the rest of society because of the existence of a decentralized system (model B), society is not as well off (B1