Adam Smith, Revolutionary

Spencer A. Leonard

Platypus Review 61 | November 2013

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Cornwallis’s 1781 surrender at Yorktown, where American soldiers sang the British Revolutionary song “The World Turned Upside Down” as the British laid down their arms.

“By exposing the historical necessity that had brought capitalism into being, political economy became the critique of history as a whole” – Theodor W. Adorno[1]

Unlike Jean-Jacques Rousseau or even Friedrich Nietzsche, Adam Smith is a thinker few on the contemporary Left will have much time for. This tells us more about the impoverishment of the currently prevailing intellectual environment than about the persistent, if ever more obscure, influence of bourgeois radicalism on the Left. Today, of course, it is fashionable to have ‘a critique of the enlightenment’ or, alternatively, to defend it against an array of enemies, including postmodernism, religious conservatism, and academic obscurantism. Those currents of the contemporary Left that still seek to lay claim to the Enlightenment must fend off Smith, because, like Rousseau, his is an Enlightenment that cannot be upheld simply as an affirmation of “reason” or the demand for “human rights.” Smith’s Enlightenment demands to be advanced. His 1776 treatise, An Inquiry into the Nature and Causes of the Wealth of Nations, is not a product of the Scottish Enlightenment but of the cosmopolitan radical Enlightenment, stretching from the coffeehouses of Rotterdam to the meeting rooms of Calcutta. If that cosmopolitan Enlightenment project remains “unfinished,” it is because the course of history since the publication of Smith’s magnum opus failed to fulfill and indeed undermined the radical potentials of the eighteenth century.

Smith’s powerful influence upon French revolutionaries such as the Abbé Sieyes and the Marquis de Condorcet, and through them upon Immanuel Kant, Benjamin Constant, and G. W. F. Hegel, are not as well known as they should be, but that need not detain us from coming to terms with the profound radicalism of his thought. Less well known still is the respect that Smith and his close friend, David Hume, held for Rousseau’s works. Hume, refusing to allow his famous public quarrel with Rousseau to cloud his judgment, contended in a letter to Smith that the Genevan’s writings were “efforts of genius.”[2] This was an estimate Hume doubtless knew would find favor with his friend, since as early as 1756 Smith had written an article that is perhaps the earliest discussion in English of Rousseau’s Discourse on the Origin and Basis of Inequality Among Men, singling that work out as the act whereby the Francophone world re-established its supremacy in philosophy for the first time since Descartes, displacing the preeminence of English political and social thought that had lasted for almost a century with the writings of Hobbes, Locke, Mandeville, Shaftesbury, and others.[3] Nor did Smith’s devotion to Rousseau, proclaimed in this early publication, abate towards the end of his life. For we have the testimony to the contrary of Faujas de Saint-Fond from 1784: “When I was taking tea with him, [Smith] spoke to me of Rousseau with a kind of religious respect. ‘Voltaire,’ said he, ‘sought to correct the vices and the follies of mankind by laughing at them, and sometimes even getting angry with them; Rousseau, by the attraction of sentiment, and the force of conviction, drew the reader into the heart of reason. His Contrat Social will in time avenge him for all the persecutions he has suffered.’”[4] Smith’s profound sympathy with Rousseau’s epoch-making philosophy found its highest expression in the radical political economy put forward in the Wealth of Nations, which laid the groundwork for the revolutionary wave of the late eighteenth and early nineteenth centuries no less than did the Discourse on Inequality and the Social Contract. Indeed, Smith, as much as Georges Danton or Maximilien de Robespierre, was a leading bourgeois revolutionary.

An 18th Century Pin Factory from the Encyclopédie edited by Denis Diderot and Jean le Rond d’Alembert, 1751–72.

In order to fully grasp the radical specification of Rousseau’s call for the conscious advance of human freedom contained in Smith’s work—that is, in order to grasp the work’s bourgeois-revolutionary implications—readers and interpreters must get beyond the outward sobriety of the Wealth of Nations to the “very violent attack . . . upon the whole commercial system” that lies at its core.[5] Living in the most revolutionary society of his age, Smith was nevertheless not complacent. He, no less than Rousseau, demanded a revolutionary transformation of his society, railing with all his strength of intellect against what Rousseau called “our absurd civil institutions whereby the real welfare of the public and true justice are always sacrificed to some apparent order, which is in reality detrimental to all order and which merely gives the sanction of public authority to the oppression of the weak and the iniquity of the strong.”[6] It was in full recognition of the flagging of British philosophy and, with it, of the British revolution, that Adam Smith wrote a work that was, in its way, not only the most revolutionary of 1776, but also the crucial text, along with the Abbé Raynal’s A Philosophical and Political History of the Settlements and Trade of the Europeans in the East and West Indies, linking Rousseau to the French Revolution and German Idealism.

Smith is one of those indispensable eighteenth-century thinkers who articulates unmistakably that century’s critique of our own interminable twentieth century. Profoundly, even originally, aware of the depth of the self-transformative potential of humanity, Smith demands that we transform ourselves. Author of one of the greatest acts of public reason ever penned, Smith demands that our time too make a thoroughgoing attack upon the entire commercial system. Prophet of cosmopolitan civil society, Smith would be outraged at the mockery made of it by contemporary globalization. Revolutionary diagnostician of the social ground of freedom, he would condemn not only statist capitalism but also no less certainly market capitalism’s integral connection with, and extension of, its own monstrous outgrowth, the Bonapartist state. But rather than recognize and potentially advance this critique, the desiccated thought of what passes for Marxism or, for that matter, of what passes for liberalism, can only adopt a posture of knowing superiority respecting Smith about whose thought it does not have a clue.

Take, for example, the prominent Marx scholar David Harvey, whose writings are part of the gospel of the contemporary academic and activist Left. Harvey describes Smith as a “liberal utopian” committed to a theology of “perfectly functioning markets and the hidden hand.”[7] A spokesman for the capitalist class, Harvey’s Smith promotes their exploitative system as a “utopianism of process” from which he helpfully “derive[s] a political programme,” the essence of which Harvey states as follows: “Give free markets room to flourish, then all will be well with the world.” By way of closing, Harvey does not fail to instruct his reader that “this, of course, is the ideology that has become so dominant in certain of the advanced capitalist countries … these last 20 years.” Smith represents a set of policy prescriptions against which, presumably, the Marxist David Harvey has others to oppose. And, surely, we can all agree that “Marx mounted a devastating attack upon this utopianism of process in Capital.”[8]

But Harvey should not be singled out. Rather, he expresses something like the conventional view of the matter—while we might puzzle over Marx’s relationship to, perhaps dialectical appropriation of, Hegel’s dialectic, Marx’s critique of political economy is an attack, a refutation, or at least a criticism. It would be truer to say that Capital is closed to Harvey, despite his being that book’s “leading interpreter” in these spiritless times, precisely because the Wealth of Nations is impenetrable to him. That Smith represents a major stage in the development of the labor theory of value—formulating for the first time, for instance, the distinction between productive and unproductive labor—is of no concern to the likes of Harvey. At the heart of Smith’s project is the attempt to advance, in theory and practice, the radical emancipation entailed in free wage-labor. This social emancipation—that is, the freedom of labor to sell itself on the market unconstrained by the demands of customary privilege—is utterly obscured by Harvey’s anachronistic talk of “free-market” regulatory policy. Nor is the more overwrought Marxology of a Michael Heinrich any stronger on the question of Marx’s relation to Smith and to bourgeois political economy more generally. Understanding Marx to be anti-bourgeois, Heinrich consigns to the dustbin of “worldview Marxism” all those who might imagine that Marx’s thought is in any way immanent to political economy.[9]

As a systematic labor theorist of value, Smith proves himself an indispensable philosopher of the revolutionary Third Estate. For him, the world of commercial society is one grounded in the free labor of a newly emergent class, a class of city-dwellers freed from serfdom and customary claims. The city-dwellers or “bourgeois” of the late medieval and early modern period share in a common freedom, worker and merchant alike. Their society, as Smith outlines in Book Three of the Wealth of Nations, emerges as a result of what can only be dubbed a slave revolt in what had been a relatively obscure corner of Europe. This slave revolt, incidentally, has not ceased to this day, and not just in the sense that it has spread from Western Europe to other parts of the world. The masses of humanity, including in Europe and America, have not ceased to demand a world in which they do not require the benevolence or indulgence of the baker, the butcher, the brewer, or anyone else in order to live their lives as they choose under the law. To this day, this emancipation is only available to the broad masses of the population in precisely the way in which Smith demanded it, i.e. by wage labor. To this day, the great democratic demand is that people should be subject to no arbitrary power of wealth, but only to that power that “possession immediately and directly conveys” [48] to the owner of money: command over labor.

What Smith termed “commercial society” is best understood precisely as the interrelationships of people exchanging the products of labor. As he famously wrote:

When the division of labor has been once thoroughly established it is but a very small part of a man’s wants which the produce of his own labor can supply. He supplies the far greater part of them by exchanging … Every man thus lives by exchanging, or becomes in some measure a merchant, and the society itself grows to be what is properly [called] a commercial society. [37]

That such a commercial society is class divided represents for Smith an achievement, one that simultaneously exposes as irrational the prescriptive claims of all past ruling classes and, indeed, of the ruling classes of his own day. If we still say that the history of all hitherto existing societies is the history of class society, those societies and that history is simultaneously worthy of condemnation for having failed to have been. That is because they failed to recognize and realize themselves as class societies, and were thus inadequate to the concept of society itself. In other words, all wealth is originally labor, from which, after the claims arising from “the accumulation of stock and the appropriation of land” [65] are deducted as profit and rents, those who expect in addition, say, personal deference or sexual favors fail to recognize (and must again be made to understand) that this is a class society. As Adorno remarks, crediting the 19^th century legal historian J. C. Bluntschli, “society . . . [is] a concept of the third estate.”[10]

Though the fact is inimical to most leftists, the historical emergence of freedom was occasioned by the demand for class society. The demand for work, i.e. the demand to be subject only to the social power that properly appertains to money, led to that world-historical liberation from “community” that we call the birth of the modern individual. This demand for freedom from the need to rely upon the benevolence of others, this struggle for free wage-labor, remains the greatest social movement on earth. It should not be thought that workers and those struggling for employment are simply resigned to working for a master. Rather, the worker’s demand for work must be viewed as simultaneously a demand for a form of private property adequate to its concept.

Driven to dialectics by his struggle against the French Physiocrats and the British mercantilists, Smith overturns all past political economy. Though his work is chiefly associated with the demand for free markets and the “invisible hand,” none of this is in fact peculiar to Smith. Rather, as part and parcel of the project of the revolutionary Third Estate reaching back into the seventeenth century, these were mainstream concerns of political economy from at least the time of John Locke and Sir Dudley North. Similarly, the character and productive potential of the division of labor, so closely associated with Smith’s name, forms a subject of intense reflection and analysis nearly three-quarters of a century before the Wealth of Nations in the writings of Sir William Petty. The neglect of what is novel in Smith goes hand in hand with the one-sided rejection of liberalism and of the bourgeois revolutions.

What is in fact central to Smith’s work is the fundamental clarification of labor as the category at the heart of bourgeois freedom. This further specification of modern freedom reaches toward Ricardo and the Ricardian theorists of the labor movement, as well as the nineteenth century more generally, inasmuch as Smith raises not only the question of the emergence of class society, but also of the Third Estate’s internal capacity for class division. As Smith notes:

We have no acts of parliament against combining to lower the [wages of labor], but many against combining to raise it . . . We rarely hear, it has been said, of the combinations of masters; though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour . . . To violate this combination is every where a most unpopular action, and a sort of reproach to a master among his neighbours and equals. We seldom, indeed, hear of this combination, because it is the usual, and one may say, the natural state of things which nobody ever hears of . . . [The workers’ combinations, by contrast,] are desperate [as they] act with the folly and extravagance of desperate men who must either starve or frighten their masters into an immediate compliance with their demands. The masters upon these occasions are not as clamourous upon the other side, [yet] they never cease to call aloud for the assistance of the civil magistrate and the rigorous execution of [anti-labor laws]. [84-5]

As Smith remarks clinching the matter, “A man must always live by his work” [85]. And, just as Smith reaches toward Ricardo and Ricardian theorists in his analysis of class formation, so he also connects the revolutionary Third Estate to its progeny and heir, the nineteenth-century workers’ movement, by calling not only for the emancipation of labor but also for the fulfillment of that emancipation in the struggle for higher wages and better working conditions. On this matter, the Wealth of Nations could not be clearer:

[A man’s] wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more; otherwise it would be impossible for him to bring up a family, and the race of workmen would not last beyond the first generation . . . differences in the mode of subsistence [of workers] is not the cause but the effect of the difference in wages; though by a strange misapprehension, I have frequently heard it represented as the cause. It is not because one man keeps a coach while his neighbor walks afoot that the one is rich and the other poor, but because the one is rich he keeps a coach, and because the other is poor he walks afoot . . . Is improvement in the circumstance of the lower ranks of the people to be regarded as an advantage or as an inconveniency to the society. The answer seems abundantly plain . . . The liberal reward of labor, as it is the effect of increasing wealth, so it is the cause of increasing population. To complain of it is to lament over the necessary effect and cause of the greatest public prosperity. [85, 93, 96, 99]

Thus, while demanding legal protection for labor’s right to organize, Smith could still hope, and moreover hope in good faith, that bourgeois freedom realized in and through the supremacy of economics would one day lead to the emancipation of laboring humanity.

It is the commitment to philosophy and freedom that confers forthrightness upon the great scientific pronouncements of the bourgeois class as exemplified by the author of the Wealth of Nations. Such bourgeois revolutionary thought stands, as might well be expected from a self-proclaimed devotee of Rousseau, as an indictment of “the history of all hitherto existing societies,” including that of Smith’s own day. Marxism and its critique of political economy represent the continuation of this revolutionary bourgeois tradition, albeit in changed conditions. It is by no means the repudiation of Smith’s radical Enlightenment. For Marxism seeks in its struggle to advance social-political emancipation not to redeem history from the wreckage of Smith’s “utopianism of process”; rather, it seeks to redeem Smith’s project from the wreckage of history. Under conditions of capital, Smith’s thought itself demands its own critique. |P