The Other Side of Adam Smith; W. Irvine

47 The Other Side of AdamSmith by William B. Irvine A dam Smith has suffered the fate that of ten befalls the creator of a new "ism": We no longer regard him as a mere mortal, but instead take him to be the embodiment of the doctrine he espoused. Many would like to think of Adam Smith as a one-dimensional, all-purpose capitalist. If the truth be known, though, Smith had anoth er side that some will find shockingly anticapital istic. Nowhere does this "other side" come through more clearly than in Smith's Theory of Moral Sentiments (see especially Chapter 1 of Part IV). In this work, published 17 years before his better-known WealthofNations,Smith is more interested in philosophy than in economics; and in it he questions what many would take to be basic tenets of capitalism. Smith, to begin with, questions whether material wealth, which capitalism produces so efficiently,is worth possessing:"Power and riches appear. . . to be, what they are, enormous and operose ma chines contrived to produce a few trifling conve niencies to the body." The machines in question consist "of springs the most nice and delicate, which must be kept in order with the most anxious attention, and which in spite of all our care are ready every moment to burst into pieces, and to crush in their ruins their unfortunate possessor."

He reminds us that poverty-i.e., the absence of power and riches-has its advantages: ". . . the beggar, who suns himself by the side of the high way, possesses that security which kings are fight ing for." Capitalism, as Smith well knows, is prodigious Professor Irvine teaches philosophy at Wright State Uni versity in Dayton, Ohio. when it comes to supplying consumers with an endless stream of gadgets. Smith suspects, though, that little good can come of them: "How many people ruin themselves by laying out money on trinkets of frivolous utility?" "All their pockets," he tells us, "are stuffed with little conveniencies . . . . They walk about loaded with a multitude of baubles ... ,some of which may sometimes be of some little use, but all of which might at all times be very well spared, and of which the whole utility is certainly not worth the fatigue of bearing the burden." By way of illustration, Smith tells us that" A watch . . . that falls behind above two minutes in a day, is despised by one curious in watches. He sells it perhaps for a couple of guineas, and pur chases another at fifty,which will not lose above a minute a fortnight." There is a bit of a paradox in this, though, since after obtaining the new watch, the person in question "will not always be found either more scrupulously punctual than other men, or more anxiously concerned upon any other ac count, to know precisely what time of day it is."

What has happened, of course, is that the owner of the watch has become more concerned with the watch itself than with his reason for buying a watch in the first place. Anyone who has ever traded up to a better stereo, car, or food processor knows the feeling. Smith then describes for us the life of "the poor man's son, whom heaven in its anger has visited with ambition .... " This son admires the condi tion of the rich, and soon finds himself longing for a palace, a carriage, and servants; and to obtain them, he "labours night and day to acquire talents superior to all his competitors." Indeed, to obtain 48 THE FREEMAN • FEBRUARY 1990 the "conveniencies" of being rich, "he submits in the first year, nay in the first month of his applica tion, to more fatigue of body and more uneasiness of mind than he could have suffered through the whole of his life from the want of them." Consider, along these lines, the fate of the first-year law stu dent or of the entrepreneur who puts in 80-hour weeks in his attempt to start a new business.

Smith concludes his tale of the poor man's son as follows: "Through the whole of his life he pursues the idea of a certain artificial and elegant repose which he may never arrive at, for which he sacrifices a real tranquility that is at all times in his power, and which, if in the extremity of old age he should at last attain to it, he willfind to be in no re spect preferable to that humble security and con tentment which he had abandoned for it." Smith would presumably not find it surprising that many Americans are willing to spend 50 weeks engaged in what is often unpleasant employment so that they can spend two weeks of "artificial and elegant repose" at some beach or mountain resort. According to Smith, the retirement of the ambi tious man is not one to be admired: "It is then, in the last dregs of life, his body wasted with toil and diseases, his mind galled and ruffled by the mem ory of a thousand injuries and disappointments which he imagines he has met with from the injus tice of his enemies, or from the perfidy and ingrat itude of his friends, that he begins at last to find that wealth and greatness are mere trinkets of frivolous utility."

Intimationsof Thoreau I cannot read the above passages without think ing of Henry David Thoreau, whom many would take to be the polar opposite, philosophically speaking, of Adam Smith. A century after Smith, Thoreau told us that the mass of men lead lives of quiet desperation and asked, "Why should we be in such a desperate haste to succeed, and in such desperate enterprises?" Like Smith, Thoreau doubts that wealth can bring happiness and thinks that men's labors tend to be in vain. "The twelve labors of Hercules," he tells us, "were trifling in comparison with those which my neighbors have undertaken; for they were only twelve, and had an end." He continues in the same vein: "How many a poor immortal soul have I met well nigh crushed and smothered under its load, creeping down the road of life, pushing be fore it a barn seventy-five feet by forty, its Augean stables never cleansed, and one hundred acres of land, tillage, mowing, pasture, and wood-lot!" This is but one passage from Walden that would have blended perfectly into the text of The Theory of Moral Sentiments.

What are we to make of all this? Some might be tempted to deny that Adam Smith wrote the words I have attributed to him. Others might sug gest that perhaps there were in fact two Adam Smiths, one (a capitalist) who wrote The Wealth of Nations and the other (a proto-Marxist) who wrote The Theory of Moral Sentiments. Yet others might pass off The Theory of Moral Sentiments as a youthful indiscretion on the part of Smith, and hold him to have later outgrown the views he ex pressed there. I would like to suggest, though, that the writings of Smith in The Wealth of Nations and The The ory ofMoral Sentiments are not as inconsistent as they might appear to be. Indeed, I would like to suggest that those who claim that they are incon sistent are confused about the essential nature of capitalism. Notice, in the first place, that economics, insofar as it pretends to be a science, should be value neutral. It is not the economist's job to tell us what we should want or what we should do; rather, it is his job, once we have told him what we want, to tell us how best to get it. Thus, it is not his job to tell us that we should reduce the unemployment rate; in stead, it is his job to tell us how best to do this, once we have decided it is worth accomplishing. Like wise, it is not the economist's job to tell us that we· should take steps to guarantee every worker a minimum wage; instead, it is his job to point out to us the undesirable consequences (i.e., undesirable according to our values) of our taking such steps.

To be sure, most economists occasionally make pronouncements on "what we should do." We should realize, though, that when they engage in this sort of behavior, they have temporarily set aside the mantle of the scientist and put on the mantle of, say,the philosopher. We should listen to what they have to say, but we should be skeptical about the claims they make. (Let me add that we should likewise be skeptical whenever a philoso pher presents us with economic forecasts.) Seen in this light, there is nothing inconsistent about Adam Smith, in his role as economist, telling us that capitalism can provide us with a remark able array of kitchen gadgets, and Adam Smith, in his role as philosopher, telling us that kitchen gad gets aren't really worth manufacturing or owning. Notice, in the second place, that contrary to popular belief, one can consistently be both anti materialistic and a capitalist. For capitalism, be sides possessing a remarkable ability to satisfy our desire for material things, is capable of satisfying our desire for nonmaterial things. In a capitalist system, the resources of society are drawn (by an "invisible hand") to produce efficiently whatever it is that the members of that society want (or, more precisely, whatever it is that they are willing to pay for). If Americans were suddenly to lose in terest in acquiring kitchen gadgets and instead THE OTHER SIDE OF ADAM SMITH 49 found themselves driven to learn advanced topol ogy, our capitalist system would likely respond by taking steps to put advanced topology into the hands (or rather, the minds) of the masses. Similar 1y' if enough Americans decided to take after Thoreau and abandon their spacious homes in fa vor of huts in the woods, they would find the cap italist system amenable to their ends.

Of course, capitalism in a society with Thoreau vian values would. be quite unlike the capitalism we know in our society. It is unlikely that the re sources of that society would be devoted to build ing automobile factories or banks; but then again, in a society with Thoreauvian values, few would regard this (or the disappearance of jobs that it would entail) as a loss. Those who are shocked by Smith's anti-materi alistic utterances in The Theory of Moral Senti ments are for the most part those who incorrectly equate capitalism with materialism. Not only can one be an anti-materialistic capitalist, but it is quite possible that Adam Smith was one. Furthermore, just as one should not make the mistake of equating capitalism with materialism, one should not make the mistake of equating so cialism with anti-materialism. A socialist can con sistently have as his goal providing BMW's to all people, and not just to the rich. Indeed, a case can be made that one of the reasons socialist societies are crumbling around the world is that these soci eties failed to deliver the material goods they promised in the past. Just as it is possible for a cap italist to ridicule Americans' obsession with ac quiring cars, houses, and kitchen gadgets, it is pos sible for a socialist to find himself craving a new VCR.

In summary, Adam Smith was not the dogmatic capitalist that some would like him to be, but was instead a reflective person, one who realized that there is more to life than material wellbeing. Cap italists everywhere would do well to take this les son to heart and to keep in mind the other side of Adam Smith. 0 50 Soviet Admissions: Communism Doesn't Work by Peter J. Boettke Thereare annoyingmisprintsin history,but the truth willprevail! - NIKOLAIIVANOVICHBUKHARIN(1937) T he civicrehabilitation of Nikolai Bukharin . (1888-1938)in February 1988was an event of tremendous significance in Soviet histo ry.I The historical resurrection of Bukharin, who in the 1920s was arguably the most important Marxist theorist in the world and considered by Lenin to be "not only a most valuable and major theorist of the Party;. . . [but] he is also rightly considered the favourite of the whole party,"2 of fers a direct challenge to orthodox Stalinism. Not only in political terms, but also on economic grounds, Bukharin represents the key opposition to traditional Stalinist planning. As Thomas Sher lock has argued: Bukharin's rehabilitation has placed his concil iatory rural program, as well as his advocacy of moderate cultural and political lines, in direct opposition not only to the Stalinist "revolution from above," which dramatically expanded the bureaucratic reach of the state, but also to the terror of the 1930s, which destroyed the party as an autonomous political institution. The res urrected image of Bukharin is seen as a power ful antidote to the prevailing "Stalinist" rela tionship between the Soviet party-state and society and to "bureaucratic centralism" in the party.3 Bukharin, however, is not without ambiguity himself. Recognized as the author of the New EcoProfessor Boettke teaches in the Department of Eco nomics at Oakland University, Rochester, Michigan.