Wednesday, April 28, 2010

When will this Mr. Smith ever go to Washington?

Mr. Smith

David Seaton's News Links
I read and read and sometimes I come across something truly important that turns me upside down and inside out, which I want to share with as many people as I can.

This week playing under the rules of Serendip, I happened upon an article in The New Statesman by the Indian Nobel prize winner  Amartya Sen that, as the geezers of my generation were want to say, "blew my mind".

All my life I have had right wing people ramming Adam Smith down my throat as the philosopher's stone of laissez faire and  the impersonal, inhuman, invisible, hand and then out of nowhere, here comes an economist and a human being of the class of Amartya Sen and reveals an entirely new view of Mr. Smith. This is like discovering an unknown play by Shakespeare,  one which puts everything else he ever wrote into a new light.

In his article in The New Statesman that Doctor Sen entitles, "The Economist Manifesto", he presents Smith's first book, "The Theory of Moral Sentiments", which is the missing link that provides the ethical, philosophical, psychological, and methodological underpinnings to Smith's later works, including "The Wealth of Nations". In it Adam Smith reveals himself to be the closest thing to a modern Social Democrat imaginable. Let me quote Amartya Sen at length:
Smith saw the task of political economy as the pursuit of "two distinct objects": "first, to provide a plentiful revenue or subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves; and second, to supply the state or commonwealth with a revenue sufficient for the public services". He defended such public services as free education and poverty relief, while demanding greater freedom for the in­digent who receives support than the rather punitive Poor Laws of his day permitted. Beyond his attention to the components and responsibilities of a well-functioning market system (such as the role of accountability and trust), he was deeply concerned about the inequality and poverty that might remain in an otherwise successful market economy. Even in dealing with regulations that restrain the markets, Smith additionally acknowledged the importance of interventions on behalf of the poor and the underdogs of society. At one stage, he gives a formula of disarming simplicity: "When the regulation, therefore, is in favour of the workmen, it is always just and equitable; but it is sometimes otherwise when in favour of the masters." Smith was both a proponent of a plural institutional structure and a champion of social values that transcend the profit motive, in principle as well as in actual reach.

Smith's personal sentiments are also relevant here. He argued that our "first perceptions" of right and wrong "cannot be the object of reason, but of immediate sense and feeling". Even though our first perceptions may change in response to critical examination (as Smith also noted), these perceptions can still give us interesting clues about our inclinations and emotional predispositions.

One of the striking features of Smith's personality is his inclination to be as inclusive as possible, not only locally but also globally. He does acknowledge that we may have special obligations to our neighbours, but the reach of our concern must ultimately transcend that confinement. To this I want to add the understanding that Smith's ethical inclusiveness is matched by a strong inclination to see people everywhere as being essentially similar. There is something quite remarkable in the ease with which Smith rides over barriers of class, gender, race and nationality to see human beings with a presumed equality of potential, and without any innate difference in talents and abilities.

He emphasised the class-related neglect of human talents through the lack of education and the unimaginative nature of the work that many members of the working classes are forced to do by economic circumstances. Class divisions, Smith argued, reflect this inequality of opportunity, rather than indicating differences of inborn talents and abilities.
Please, do yourselves the favor of reading the whole article. No one could teach this class better than Amartya Sen.

So there you have it: Adam Smith, the man we all thought had established the ultimate justifications for selfishness, was in fact a believer in liberty, equality and fraternity.

Just as I think that progressives should spout the Bible and not leave that amazing power-text as the sole property of the right, so too, this little known text of Adam Smith should leaven their arguments.

So much of the problem of American progressive politics is to reclaim the language. I have always believed that the muddying of American English is a deliberate affair and the muddier it gets the more difficult it is to even think certain things. For example in every language in the world, including the Queen's English, "red" is the color of the left. But, only a relatively short time ago, it suddenly became the word to describe conservative. So we have gone from the "red scares" and "Red China" of my youth, to the "red states" of today. Does anybody know who did this first? This is just one flagrant example, but the muddying of the language is endless.

Confucius was asked what would be the first thing he would do if he were made emperor and he said he would "clarify terms". That is what is needed, new words for old things.

The present economic crisis, brought on by speculators who have made fortunes destroying the lives of middle and working class families, is a "teaching opportunity" if ever there was one. Watching the likes of "Fabulous Fabrice" or Lloyd Blankfein as they go about doing "God's work", is a unique possibility for masses of people to learn how the world really works and to work up an appetite to change it.

But we always come up against language.

It is really difficult to talk about class conflict in American English because all the traditional words like, "class struggle", "contradiction" etc, are taboo or sound foreign to American ears. This is as if a doctor would have to use awkward euphemisms when making a diagnosis. Imagine a gynecologist writing, "the patient reports experiencing severe discomfort whenever a dime is inserted in her pay phone." Communication would suffer. The march of science would be arrested.

Like Confucius we have to reclaim the language.

Any real change has to come from people who feel oppressed and victimized, not just those who look upon their misfortunes with benign sympathy.

Probably the most significant thing that could happen in American politics would be the rebirth of the language of progressive politics among the working poor. This crisis is a unique chance to cut through the fog and double talk and get to central questions.

This is where texts like Adam Smith's and the Bible come in. The left simply must loosen its connection with Ruccola and communicate. DS


Mike Doyle said...

I've seen the 'other side' of Adam Smith discussed as you do here; e.g. here and here . And lots of discussion here:

But I doubt restoring meaning to words will do the job of restoring discussion or debate. My experience is that, in a political context, words have been severed from all meaning except as signifiers as to what team you're on: "free market" "big government" "cut taxes" etc. In the 'debate' over healthcare you just mention "Canada" or "single payer" to a Tea Party type and they look at you like you're a lunatic and walk away. They already know that you're the enemy.

The right has been very successful in blaming all things bad - real or imagined - on "liberals" and "Democrats" by repetitively juxtaposing those labels against unpleasant sounding words - those evoking negative emotions. That was Gingrich's tactic in the early 90s and now the Right's current WordDoctor - Dr Frank Luntz. Truth, accuracy, meaning are to be avoided.

See also the recent post from Billmon - I think his point is relevant.

Forensic economist said...

Red states - apparently three or four elections ago one of the networks colored the map red for Republicans and blue for democrats. So "red states" is an artifact of TV news. You can think of it as red neck states.

Forensic economist said...

On Adam Smith -

I highly recommend reading Wealth of Nations. In addition to talking about the enlightened self interest of business people, he had a lot of other less pro business thoughts that don't often get the same press.

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”." -- in other words, business people will not compete but will collude wherever possible.

He did not believe that corporations would ever rise to be the dominant form of organization, since the capital providers would not be able to trust the managers of the companies, who would use the company for their own personal benefit.

He also advocated for progressive taxation on the grounds that the rich could afford it. His advocacy of free trade should be analyzed in the context of the time - it meant that he was against the landed aristocracy who had a protected market for wheat.