Friday, October 8, 2010

Das Adam Smith Problem

It's a polite statement, euphemism per se for exposing the "supposed" cognitive dissonance of Adam Smith - the so called paradoxical difference between his two books - Theory of Moral Sentiments and Wealth of  Nations. Excellent paper by David Wilson and William Dixon refuting the whole premise of that problem - DAS ADAM SMITH PROBLEM - A Critical Realist Perspective:

"Abstract:
The old Das Adam Smith Problem is no longer tenable. Few today believe that Smith postulates two contradictory principles of human action: one in the Wealth of Nations and another in the Theory of Moral Sentiments. Nevertheless, an Adam Smith problem of sorts endures: there is still no widely agreed version of what it is that links these two texts, aside from their common author; no widely agreed version of how, if at all, Smith’s postulation of self-interest as the organising principle of economic activity fits in with his wider moralethical concerns.

We argue that the enduring Adam Smith problem may be solved by recourse to a realist perspective that recognises the different levels of social reality to which Smith refers in his discourse. Essential to Smith, we try to show, is the action-theoretic distinction between motive and capacity; between a typology of empirical human acts, on the one hand—self-love and benevolence in Smiths terminology—and the (non-empirical) condition of possibility of all human action—what Smith calls the sympathetic principle—on the other."

Excerpts:

Talk of a ‘natural harmony’ in human affairs, of a ‘concord’ produced by the now-celebrated ‘invisible hand’, runs like a leitmotif through Adam Smith’s work. A key question in Smith-scholarship is then: how does Smith suppose this harmony to be constituted? According to the Problem-theorists, Smith claims in WN that individuals motivated by self-interest, and in virtue of that motivation alone, are able to co-ordinate their activities, whereas in TMS he claims that benevolence alone is supposed to do the job. Of course, if Smith had claimed these things, he would stand guilty (of inconsistency) as charged. But these assertions play no role in Smith’s social theory; the Problem, for whatever reason(s), is a post-Smith fabrication.

Apropos Das Adam Smith Problem: For Smith to say that the human actor sympathises does not mean that the Smith of TMS postulates a naturally altruistic, rather than a naturally egoistic, actor—a view that he is then supposed to have reversed in the Wealth of Nations. Of course it is true (to paraphrase Smith himself) that we should not expect our dinner from the benevolence of the (commercially oriented) butcher and baker. On the other hand, it would be surprising (and worrying, for all sorts of reasons) if the dependent child did not expect his dinner from the benevolence of his kith and kin (who, for some people at least, are also commercial butch- ers and bakers). Smith recognises that, depending on circumstance, we are capable of both behavioural dispositions. But Smith also recognises that to say that we are capable of acting and that this acting takes di
fferent forms— of course we are and of course it does—is not to say how we are capable.

Smith’s position on these matters hardly came as a bolt from the blue. Rather it is all part of a wider current of eighteenth century thought that rejects the crude Hobbesian view of self-interested behaviour. Like others in the so-called British Moralist tradition Smith wants to re-think the ques- tion as to what a viable (and prosperous) social order presupposes. The spontaneous emergence of a (relatively) liberal political economy in Britain by the early eighteenth century had called into question many of the fun- damental assumptions Hobbes makes in regard to human nature. In Hobbes, individual self-interest needs to be held in check by an all-seeing, all- powerful Sovereign. Evidently, though, in the light of events, self-interest needed to be re-thought as a constructive, rather than destructive, force."

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