(\lectures\smith)

LECTURE THREE: The Scottish Enlightenment: Adam Smith

The seeds of progressive time

It is in the works of the Scottish and French philosophers that one would have to find the seeds of these ideas of improvement, a growing sense of optimism and self confidence, a belief in the triumph of light and reason. Why?

Pre Conditions for sociological introspection.

Troeltsch: 'What is ultimately and crucially required in such an age, Troeltsch writes, is a spark that is ignited during that very brief period when the two social orders are of almost equal power in the loyalties they inspire and the incentives they arouse in reflective minds...it is not the transition as such that is precipitative it is the confrontation, so to speak, of the two orders...out of such confrontation comes friction...'

Gellner argues that 'Sociology came into being because men were struck by the contrast between an old aristocratic agrarian military order and a commercial industrial bourgeois one which seemed to be replacing it, and they sought its meaning.' As it usual, those who were struck were not those actually in the centre of things, but those on the margins or boundaries.

Thus the eighteenth century gap which began to transform serial explanations into ideas of progress was a gap between different parts of Europe. It was clearly possible, men saw for the first time, to manipulate the institutions of a society and to generate rationality, tolerance, wealth etc. This gap was clearly very closely connected to the earlier one, for it was the wealth and opulence of England and Holland, now increasingly based on India, the East and West Indies and America, which was so impressive. But the proximate cause was not so much the new worlds themselves,but the way they helped to shift the balance from south to northern Europe but only selectively within northern Europe. And especially in Scotland.

ADAM SMITH

His importance

The historian H.A.L. Fisher summarized the life and influence of Adam Smith as follows. 'A Scot by birth and descent and mixing with the skippers and merchants of Glasgow, where he was long a Professor, he caught the temper of a great seaport struggling against fiscal fetters. His Wealth of Nations (1776), the Bible of Economic Science, states in powerful and measured terms the case for Freedom of Trade, and has long governed British policy. Pitt the younger, Huskisson, Peel, Gladstone, Asquith were his pupils. The soul of modesty.'


Life

born in 1723 at Kirkcaldy, Scotland

published Theory of Moral Sentiments in 1759

travels in France in 1764 6

published The Wealth of Nations in 1776

died in 1790

Some contemporary events that influenced him:

the growth of the Empire the west Indies & trade

the growth of America

the stasis of Japan, China and India

the subjugation of the Highlands Scots 1745

fading of religious enthusiasm, decline of Calvinism

growth of science Newton and others

affluence and liberty of England

change from predation to production

growth of cities Glasgow

manufacturing revolution

from pastoral to commercial life

development of philosophy, especially David Hume, French
philosophes, including Montesquieu


Theoretical methodology:

four stage theory, determined by modes of subsistence

One of his most famous instances of 'conjectural history' or model building was his elaboration of the four stage theory of civilization which has provided the foundation for all of the social sciences since he wrote. Basically Smith divided the history of civilization into the four 'stages' of hunter gatherer, pastoralist, settled agriculturalist and 'commercial' society. These stages were defined by the mode of gaining a living and were associated with many other features the density of population, the development of government, the rise of private property, the development of arts and crafts. Through detailed analysis, Ronald Meek has traced this framework back to Smith's lectures of 1751. This was the very year in which Turgot deve¬loped a similar theory, and both of them had been inspired by Montesquieu. Meek believes however that Smith took the idea much further than Montesquieu by seeing the stages as naturally deve¬loping out of each other, and as primarily determined by the mode of subsistence or earning a living.

The importance of this stadial framework was immense. It was the foundation for Smith's thought and that of Ferguson, Millar, Kames and others. It was elaborated and developed by the those who re founded the social sciences in the second half of the nineteenth century, strengthened and made into a unified picture of man and nature through the Darwinian vision. It helped provide the framework for the understanding of world history and in particular the mass of new knowledge generated by the expansion of Europe.

method of contradictions and balance of forces of vice/virtue

The Theory of Moral Sentiments: the two major forces in people, self love (egotism) and social love (the desire for approbation), out of the balance of the two that everything flows... (a very eighteenth century theme, eg. Mandeville 'Private Vice, Public Benefit', Pope et al.)


the invisible hand

Above all, it replaced God by an invisible hand, the ghost in the machine, to use Koestler's phrase. It incorporated the impor¬tant idea of the law of unintended consequences into a philosophy which would provide an underpinning for the new world. Meek captures some of this function when he writes that 'the notion that historical processes were autonomous but law governed led to (or was closely associated with) the notion that economic processes in a commercial society possessed the same characteris¬tics. The economic "machine", it was postulated, like the histor¬ical "machine", worked unconsciously but in an orderly and pre-dictable manner to produce results which could be said to be "subject to law" and which therefore constituted a perfectly proper field of enquiry for the social scientist...The historical machine automatically produced "progress", which was proclaimed to be (up to a point) a good thing; the economic machine automa¬tically maximised the rate of growth of the national product, which was also proclaimed to be (up to a point) a good thing.' Thus the fact that social, linguistic and economic systems were all like machines, which humans both constructed and improved, made them analysable and guaranteed their 'progress'. And all this happened not through design, but by accident, through unin¬tended consequences. If the world was like a machine, the indi¬viduals in it were cogs who, unbeknown to them, were playing an important part in its progress. Thus 'men in pursuing their own objectives seemed frequently to contribute to outcomes which they did not intend or foresee. This doctrine is sometimes described as the law of "unintended social outcomes" but is more usually cited, in Smith's case, as the doctrine of the "invisible hand" as in the statement that man is "led by an invisible hand to promote and end which was no part of his intention."'

the Newtonian method of induction and deduction

Here again he developed an approach which was in the Newtonian tradition. It appears that Smith first encountered Newton's method in his 'third or magi¬strand year at Glasgow', that is in 1739 40, when he was about sixteen. When he returned from Oxford he would have had available the outline of that system published by the recent Professor of Mathematics at Edinburgh, Colin Maclaurin. In his Account of Sir Isaac Newton's Philosophical Discoveries (1748) Maclaurin noted that the scientist 'should begin with phenomena, or effects, and from them investigate the powers or causes that operate in nature; that from particular causes we should proceed to the more general ones, till the argument ends in the most gen¬eral: this is the method of analysis. Being once possessed of these causes, we should then descend in a contrary order, and from them, as established principles, explain all the phenomena that are their consequences, and prove our explications; and this is the synthesis. It is evident that, as in mathematics, so in natural philosophy, the investigation of difficult things by the method of analysis, ought ever to precede the method of composi¬tion, or the synthesis. For in any other way we can never be sure that we assume the principles that really obtain in nature; and that our system, after we have composed it with great labour, is not mere dream and illusion.' In other words there was a back¬wards and forwards between induction and deduction.


law of unintended consequences
comes out of his theory of the invisible hand and also the theory of private vice, public benefit, as above


theory of paradigms and theory of creativity

as in his 'History of Astronomy', anticipates Kuhn on paradigm shifts (e.g. Kuhn)

as in his theory of wonder and amazement and puzzle solving and overcoming gaps between things as cause of scientific advance

chains of causation : direct and indirect etc.

we shall see in his findings

need for comparison and comparative method

The method required a huge amount of data, for if one were to examine the laws of motion behind the 'great machine' of the world, a wide sweep of materials across time and space were needed, as Montesquieu, whose aims were very similar, had found. As regards space, it was important to consider all kinds of civilization at every level. Thus Smith used his experiences in France, Glasgow and elsewhere, and his collection of travel li¬terature, to learn about China, India, the American Indians and anything else that he could. The work of Du Halde on China, and of Lafitau and others on America were especially important and like Montesquieu he tried to absorb the great rush of new know¬ledge pouring into Europe into his general theories. He was able to do this the more effectively because, like Montaigne, Smith maintained a lofty and detached relativism. For example, he recognized that in aesthetics, as well as in everything else, standards were variable and there was nothing that was ultimately 'right'. 'What different ideas are formed in different nations concerning the beauty of the human shape and countenance! A fair complexion is a shocking deformity upon the coast of Guinea. Thick lips and a flat nose are a beauty. In some nations long ears that hang down upon the shoulders are the objects of univer¬sal admiration. In China, if a lady's foot is so large as to be fit to walk upon, she is regarded as a monster of ugliness.'

models and conjectural history

All this comparative data helped him to fill out the general theory of the evolution of human civilizations which was his life's central work, but even the wealth of material left huge gaps. In particular, it was very difficult to know what had happened in periods before written records survived or in oral cultures. To overcome this problem he developed a method which Dugald Stewart termed 'theoretical or conjectural history'. This was history where in the absence of direct evidence, as Stewart put it, '"we are under a necessity of supplying the place of fact by conjecture; and when we are unable to ascertain how men have actually conducted themselves upon particular occasions, of considering in what manner they are likely to have proceeded, from the principles of their nature and the circumstances of their external situation."' The method was very close to the Newtonian method. On the basis of the actual evidence one would build up a set of hypotheses or conjectures, moving from the known to the unknown, and then see if these then elicited any further information which refuted or confirmed the 'conjectures'.

mechanical analogies and society as a machine

Smith used the metaphor of a machine in most of the branches of his analysis. In his early work on the origin of human languages he had likened their structure and progress to that of machines. Likewise, he applied the idea in relation to the development of scientific or artistic systems or paradigms. 'Sy¬stems in many respects resemble machines. A machine is a little system, created to perform, as well as to connect together, in reality, those different movements and effects which the artist has occasion for. A system is an imaginary machine invented to connect together in the fancy those different movements and effects which are already in reality performed.' Or again, society as a whole could be considered as a vast machine. 'Human society, when we contemplate it in a certain abstract and philo-sophical light, appears like a great, an immense machine, whose regular and harmonious movements produce a thousand agreeable effects.' Finally, the economy could be regarded as a vast ma¬chine.

The analogy gave him confidence that he was invest¬igating an infinitely complex set of inter relations, a structure of some sort. Behind the visible world there lay a set of moving parts, obeying certain rules and principles. This had given Newton his inspiration and Smith's critics explicitly saw Smith as attempting to discover the 'laws of motion', not of the physi¬cal, but of the social and intellectual universe.

* * *

SOME THEORIES

the natural progress to affluence if constraints lifted

Adam Smith's economics were based on a broad philosophical tradition concerned with natural law and human nature. The basic premise here, which he derived from Pope, Hutcheson and others, was that man and the natural laws of the universe were in tune. The secret was to release the inhibitions and constraints and then there would be development. Smith's apparent belief in the natural tendency towards progress, and particularly economic progress, is well known. There was the early statement that '"Little else is requisite to carry a State to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things."'

This attempt to free the natural instincts of man is behind Smith's famous description of man's competitive and rational drives. Smith assumes that the force which leads to the division of labour and accumulation of wealth is 'a certain propensity in human nature...to truck, barter, and exchange one thing for another'. This is a distinctive and original feature of mankind, connected to the development of reason and speech. 'It is common to all men, and to be found in no other race of animals, which seem to know neither this nor any other species of contracts.' One could go back even further; 'If we should enquire into the principle in the human mind on which this disposition of trucking is founded, it is clearly the natural inclination every one has to persuade. The offering of a shilling, which to us appears to have so plain and simple a meaning, is in reality offering an argument to persuade one to do so and so as it is for his inter¬est. Men always endeavour to persuade others to be of their opinion even when the matter is of no consequence to them.'
Once this natural tendency is allowed freedom, the division of labour will mean that 'Every man thus lives by exchanging, or becomes in some measure a merchant, and the society itself grows to be what is properly a commercial society.'

theory of division of labour and its advantages

Smith introduced his principle of the division of labour into his lectures sometime in the 1750s. By the time of his lectures on Jurisprudence in 1766, he was already using his favourite example, the pin maker.

This division of labour was the key to improvement and growing opulence. As Smith put it 'It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well governed society, that universal opulence which extends itself to the lowest ranks of the people.' Generalizing from his pin makers, he found that 'In every other art and manufacture, the effects of the division of labour are similar to what they are in this very trifling one; though, in many of them, the labour can neither be so much subdivided, nor reduced to so great a simplicity of operation. The division of labour, however, so far as it can be introduced, occasions, in every art, a propor-tionable increase of the productive powers of labour. The separa¬tion of different trades and employments from one another, seems to have taken place, in consequence of this advantage. This separation too is generally carried furthest in those countries which enjoy the highest degree of industry and improvement; what is the work of one man in a rude state of society, being general¬ly that of several in an improved one.

The reasons for the increase in production and hence wealth were three fold: first to the increase of dexterity in every par¬ticular workman; secondly, to the saving of the time which is commonly lost in passing from one species of work to another; and lastly, to the invention of a great number of machines which facilitate and abridge labour, and enable one man to do the work of many.' It is interesting that the third of his reasons was rather different. By breaking up a task into its component parts, it could more clearly be seen where a machine could replace a human being.

The advantages in terms of the improvements in technology, including machinery, were equally important, for the division of labour tended to make micro inventions more likely. A nice example of how this worked, and to prove his point that most mechanical inventions were made by the workers themselves.

He came very close to understanding the potential of new machinery in his early lectures when he discussed the effects of mechanical inventions, and in particular the replacement of human energy by animal, wind and water power. 'The invention of ma¬chines vastly increases the quantity of work which is done. This is evident in the most simple operations. A plow with 2 men and three horses will till more ground than twenty men could dig with the spade. A wind or water mill directed by the miller will do more work than 8 men with hand mills, and this too with great ease, whereas the handmill was reckoned the hardest labour a man could be put to, and therefore none were employed in it but those who had been guilty of some capitall crime. But the handmill was far from being a contemptible machine, and had required a good deal of ingenuity in the invention.' Even with James Watt down the corridor, however, he did not realize the revolution that was just emerging as fossil fuels opened up a vast store of carbon energy.

He did, however, notice a further effect of the division of labour beyond improving production and the chances of mechanical inventions. This was that it led to trade and exchange. 'When the division of labour has been once thoroughly established, it is but a very small part of a man's wants which the produce of his own labour can supply. He supplies the far greater part of them by exchanging that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men's labour as he has occasion for.'

The process was in fact circular and cumulative. Surpluses created exchange or commerce, commerce then encouraged further division of labour and specialization. 'Hence as commerce becomes more and more extensive the division of labour becomes more and more perfect.'

effects of commerce on civility

Smith believed that an increase in commercial activity would lead to an improvement in 'civility'. His prime evidence for its moral effects came from a comparison of various European coun¬tries. 'Whenever commerce is introduced into any country, probity and punctuality always accompany it. These virtues in a rude and barbarous country are almost unknown. Of all the nations in Europe, the Dutch, the most commercial, are the most faithfull to their word. The English are more so than the Scotch, but much inferiour to the Dutch, and in the remote parts of this country they <are> far less so than in the commercial parts of it.'

He believed that this had nothing to do with race, but rather that self interest motivated it. 'There is no natural reason why an Englishman or Scotchman should not be as punctual in perform¬ing agreements as a Dutchman. It is far more reduceable to self interest, that general principle which regulates the actions of every man, and which leads men to act in a certain manner from views of advantage, and is as deeply implanted in an Englishman as a Dutchman. A dealer is afraid of losing his character, and is scrupulous in observing every engagement.'

tendency towards predation and war

Yet, often, progress was very slow. Why was this? The almost inevitable tendency towards predations and war.

Hovering over all this was constant predation. There was internal predation of the powerful on the weak. 'There could be little accumulation of stock, because the indolent, which would be the greatest number, would live upon the industrious, and spend whatever they produced.' Even if such internal predation could be controlled, there was the danger from foreign invaders. 'Among neighbouring nations in a barbarous state there are per¬petual wars, one continualy invading and plundering the other, and tho' private property be secured from the violence of neigh¬burs, it is in danger from hostile invasions. In this manner it is next to impossible that any accumulation of stock can be made.' He pointed out that 'When people find themselves every moment in danger of being robbed of all they possess, they have no motive to be industrious.' He concluded that 'Thus large tracts of country are often laid waste and all the effects car¬ried away: Germany too was in the same condition about the fall of the Roman Empire. Nothing can be more an obstacle to the progress of opulence.'

reasons for China's 'stationery' state

Smith made a triadic comparison between the New World of North America, the old world of Europe, and the far Eastern world of China. Summing up his impressions of these three, he found that growth was 'rapidly progressive' in North America, 'slow and gradual' in Europe, and 'altogether stationary' in China. The case of the great civilization of China was particularly intriguing and a good negative case to test out his theories.
Basing himself on similar sources to those used by Montesquieu, that is the work of Du Halde and the Jesuit missionaries, Smith described the wealthy but stationary state of China, which he thought had roughly existed for at least the last four hundred years or so. Yet though it was stationary it did not seem to be declining.

Yet while China was 'a much richer country than any part of Europe' it was not only 'stationary' but its common people lived in some hardship. There were thus two puzzles. One was why had China remained stationary. The other was, why, in such a rich country, were the lower ranks so miser¬ably poor.

Smith suggested that the lack of progress was due to the inward looking, bounded, nature of China. The other element was the cultivation of rice, which made labour over abundant and provided large surpluses which encouraged economic inequality.

The bias towards agriculture and against manufacturing and especially foreign trade was noted by Smith . 'The policy of China favours agriculture more than all other employments. In China, the condition of a labourer is said to be as much superior to that of an artificer; as in most parts of Europe, that of an artificer is to that of a labourer..'

It was true that China had a very large internal trade. But they had closed up their foreign trade and this had had immense consequences.

Another thing Smith noted, like Montesquieu, was that the fruitfulness of rice led to a very dense population. 'In rice countries, which generally yield two, sometimes three crops in the year, each of them more plentiful than any common crop of corn, the abundance of food must be much greater than in any corn country of equal extent. Such countries are accordingly much more populous.' One consequence was that the rich could purchase large numbers of followers in a way that was impossible in Eur¬ope. Wealthy people 'having a greater super abundance of food to dispose of beyond what they themselves can consume, have the means of purchasing a much greater quantity of the labour of other people. The retinue of a grandee in China or Indostan accordingly is, by all accounts, much more numerous and splendid than that of the richest subjects in Europe.' At this point he does not make any connection between the avail¬ability of very cheap and plentiful labour and the relative inferiority of manufacturing and machinery.

A second consequence of rice cultivation was that it encouraged extreme social stratification, a class of landlords. This was again because of the bountifulness of rice. 'Though its cultiva¬tion, therefore, requires more labour, a much greater surplus remains after maintaining all that labour. In those rice coun¬tries, therefore, where rice is the common and favourite veget¬able food of the people, and where the cultivators are chiefly maintained with it, a greater share of this greater surplus should belong to the landlord than in corn countries.'

The other effect of the bountifulness of rice is to produce not only a very dense population, but one which will continue to grow ever more dense at every opportunity. In this way, as Smith noted, it tends to have the same effect as potatoes.

the effects of towns and how towns emerged

In a chapter significantly entitled 'Of the Natural Progress of Opulence', he started by pointing out that towns were important to commercial development. 'The great com¬merce of every civilized society, is that carried on between the inhabitants of the town and those of the country. It consists in the exchange of rude for manufactured produce, either immediate¬ly, or by the intervention of money, or of some sort of paper which represents money. The country supplies the town with the means of subsistence, and the materials of manufacture. The town repays this supply by sending back a part of the manufactured produce to the inhabitants of the country.' This was welcome for 'The gains of both are mutual and reciprocal, and the division of labour is in this, as in all other cases, advantageous to all the different persons...' Elsewhere he pointed out in a chapter titled 'How the Commerce of the Towns Contributed to the Improve¬ment of the Country' that there were three effects on the coun¬tryside. As he put it in the marginal headings these were 'be¬cause they afforded (1) a ready market for its produce (2) be¬cause merchants bought land in the country and improved it and (3) because order and good government were introduced.'

Smith was fully aware that free trading and manufacturing towns were unlikely to emerge from agrarian civilizations. Foreshadow¬ing Marx and Weber he gives an excellent sketch of their chance emergence and their peculiarity in the West. He describes how after the Fall of the Roman Empire 'Free Burghs' began to emerge in the West, having control over their own taxation and their own government. 'They were gradually at the same time erected into a commonality or corporation, with the privilege of having magi¬strates and a town council of their own, of making bye laws for their own government, of building walls for their own defence, and of reducing all their inhabitants under a sort of military discipline, by obliging them to watch and ward; that is, as anciently understood, to guard and defend those walls against all attacks and surprises by night as well as by day.'

Such a development was amazing. For instance in relation to their ability to tax themselves, it was extraordinary that the sovereigns of all the different countries of Europe should have allowed it. Given the possibility of predating on this, why were they set free?

Here Smith develops the ingenious theory that basically they managed to escape through the tension between the King and his feudal nobles. A three sided conquest, in which the King sided with the burghs against the nobles... And won out.

the odd middle class social structure of England

In considering the problem of why England's wealth had 'insens¬ibly' crept up and continued to grow, one key, Smith believed, lay in the social structure. His model of the economy and society is extremely 'modern'; it is not based on the usual Ancien Regime structure of a number of legally separate 'estates' of nobility, peasantry, clergy and bourgeois, who exchange goods and services. It is split into 'three different orders of people...those who live by rent...by wages...by profit. These are the three great, original and constituent orders of every civil¬ized society' . They are the landlords, wage labourers and employers of our modern capitalist state. It is clear from his analysis that he built this model up on the basis of his observa¬tions of how English society worked.

When trying to explain why England was so successful, he considered its geographical advantages, agreeing that it is 'perhaps as well fitted by nature as any large country in Europe, to be the seat of foreign commerce...' He also pointed out that its legal code was favourable to commerce: 'in reality there is no country in Europe, Holland itself not excepted, of which the law is, upon the whole, more favourable to this sort of industry...' But the geographical and legal advantages were less important than one other; 'what is of much more importance than all of them, the yeomanry of England are rendered as secure, as independent, and as respectable as law can make them.' In other words, it is the curious position of what roughly might be called 'the middle class' that is crucial.

As to why the yeomanry should be so powerful and prosperous, Smith's answer seems to be that in England, above all, the prop¬erty law was such that they had private property and security of tenure. Even leases are more secure than elsewhere.

These differences were at least several centuries old.

importance of easy taxes

Another part of the virtuous circle which Smith detected was that countries which were growing wealthier could afford greater taxes. 'Easy taxes' were one of his desiderata of course, but most civilizations had experienced the reverse; as they became wealthier, the separation of the classes grew, defence became more expensive and that condition which he had noted in China of a vast mass of miserably poor, with heavy rents and taxes, and a small group of very rich, tended to occur. He advocated the reverse. His first principle of taxation was equality. 'The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.' Secondly the taxation must be certain that is to say predict¬able and not arbitrary. 'The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person.' The arbitrary power of tax gatherers was disastrous. Thirdly, 'Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it.' Finally, it should be economically collected, as little as possible being siphoned off in the collection. Here he was describing a world not only of 'easy' taxes, but of a form of taxation to which the Dutch and English were accustomed, but certainly not those living in almost every other agrarian civilization in history. The powerful middle class and weak aristocratic interests were, of course, one of the bulwarks against the normal tendency towards unequal, unpredictable, inconvenient and uneconomical methods.


The security and fairness of the tax system was one consequence of the stability of the political system. Smith was very aware that random violence, whether of war, civil war, feuding or even arbitrary justice, would stifle tendencies towards commercial activity. Thus he believed that 'A man must be perfectly crazy who, where there is tolerable security, does not employ all the stock which he commands, whether it be his own or borrowed of other people, in some one or other...' On the other hand, capital would become frozen during political insecurity.

Thus the development of 'opulence' depended on the building of a whole infrastructure of legal and quasi legal protection. Contracts must be binding and enforceable. Tenure must be protected. 'As the tenants were continualy in danger of being turned out, they had no motive to improve the ground. This takes place to this day in every country of Europe except Brittain.'

what broke the clan system; rise of commercial individualism

One form of constraint on freedom which he noted, particularly in early studies, came not from the State but from the family. Smith explained the growing concern with property in the develop¬ment from hunter gatherers to settled pastoralists. 'In the age of hunters there could be no room for succession as there was no property. Any small things as bows, quiver etc. were buried along with the deceased; they were too inconsiderable to be left to an heir. In the age of shepherds, when property was greatly exten¬ded, the goods the deceased had been possessed of were too valu¬able to be all buried along with him.' Once such valuable prop¬erty occurred it tended to belong to the kinship group. In the 'age of shepherds', the respect for the family and blood line was particularly strong. 'We see many instances of the vast respect paid to descent amongst the Tartars and Arabs. Every one of these can trace themselves, at least they pretend to do so, as far back as Abraham.'

Yet, as he had himself witnessed in the Scottish Highlands, as the clanship system of the 'shepherds' gave way to the new com¬mercialized economy, the power of kinship declined. 'Regard for remote relations becomes in every country less and less, accord¬ing as this state of civilization has been longer and more com-pletely established.' Although the loss in martial spirit and warmth was to be lamented, this did increase the opportunities for the individual to keep the fruit of his or her own labour and hence encourage industriousness.
The extreme form of the break with the family could be seen in the spread of the use of last wills and testaments, and the possibility of exclusion of certain family members from the inheritance.

Something very odd and 'individualistic' had emerged in the medieval west, sometime in the period between the collapse of the Roman Empire and the tenth century. It was thus natural for Smith to argue, as others have done since, that it was the Christian clergy who introduced this device in order to encourage people to leave their property to the church.

This was a general feature, which was made even more powerful in western Europe, and particularly England, through an institu¬tion of which Smith clearly disapproved, namely primogeniture.

the night watchman State

It is often alleged that Smith advocated a weak state. This is a half truth. In fact what he suggested was that the State should both be strong, as a defence against sectional interests, but also not interfere too much. Ideally the State should be like a referee or umpire able to punish or even expel, but not actual¬ly involved in the everyday contests and exchanges that led to wealth creation.

He believed that it had been private activities and not state interference which had led to the growth of England's wealth over time.

He believed that the ideal situation would be that 'Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.'

In order to effect and support this system of 'natural liberty' 'the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings: first, the duty of protecting the society from the violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, thirdly, the duty of erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expenc to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.'

the night watchman Church

Smith likewise saw both the merits but also the dangerous absolutist tendencies of organized religion. In an interesting but little quoted chapter on the 'Institutions for Religious Instruction' he gave a brief account, no doubt heavily influenced by the views of his friend David Hume, of the dangers and advant¬ages of religious enthusiasm.

He noted the danger of politicians taking sides in sectarian squabbles, summarizing his argument in the heading 'If politics had never called in the aid of religion, sects would have been so numerous that they would have learnt to tolerate each other.' He pointed to the good example of Pennsylvania, where though the Quakers were the most numerous, 'the law in reality favours no one sect more than another, and it is there said to have been productive of this philosophical good temper and moderation.'

He saw that tolerance developed out of the productive balance and tension of different religious positions. Religious sects, he argued, usually began with the austere, puritanical, position of the country people. They may take this to extreme lengths so that 'in small religious sects morals are regular and orderly and even disagreeably rigorous and unsocial.' This puritanical attitude can be ameliorated by encouraging such sectarians to broaden their minds with science and philosophy, painting, poetry, music, dancing and such things.

Smith then considers the dangers of an Established Church, which tends again to become too powerful. Combined with the growing wealth of the State this made it 'exceedingly formid¬able.' The extreme example of this tendency was, of course, the Papacy.

What then brought down this great and increasing power, as potent a threat as the feudal lords? Smith suggests the same force as before, namely the growth of commercial wealth, and in exactly the same way. In other words, it was not destroyed from outside, but corrupted by greed from inside.

'The gradual improvements of arts, manufactures, and commerce, the same causes which destroyed the power of the great barons, destroyed in the same manner, through the greater part of Europe, the whole temporal power of the clergy. In the produce of arts, manufacturers, and commerce, the clergy, like the great barons, found something for which they could exchange their rude produce, and thereby discovered the means of spending their whole revenues upon their own persons, without giving any considerable share of them to other people. Their charity became gradually less exten¬sive, their hospitality less liberal or less profuse. Their retainers became consequently less numerous, and by degrees dwindled away altogether. The clergy too, like the great barons, wished to get a better rent from their landed estates, in order to spend it, in the same manner, upon the gratification of their own private vanity and folly. But this increase of rent could be got only by granting leases to their tenants, who thereby became in a great measure independent of them. The ties of interest, which bound the inferior ranks of people to the clergy, were in this manner gradually broken and dissolved.' This internal corruption had weakened the Established Churches well before the Reformation. But that movement was the final blow. The enthusiasm of the Reformers was supported by the puritanical zeal of ordi¬nary people, and thus 'enabled sovereigns on bad terms with Rome to overturn the Church with ease.'

(CHAPTER EIGHT OF BOOK)

how production conquered predation through commerce


the growth of justice and dangers of war

how England became rich and powerful through common law

some widespread dangers and traps:

fall in rate of profit (Holland)

law of diminishing marginal returns

the law of population

the finite resources in an organic economy

the debilitating effects of division of labour