The Other Side of Adam Smith

If the truth be known, though, Smith had another side that some will find shockingly anti-capital-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 Wealth of Nations, 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 machines contrived to produce a few trifling conveniences 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 highway, possesses that security which kings are fighting for.”

Capitalism, as Smith well knows, is prodigious 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 purchases 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 account, 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 condition 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 the “conveniencies” of being rich, “he submits in the first year, nay in the first month of his application, 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 student 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 will find to be in no respect preferable to that humble security and contentment 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 ambitious 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 memory of a thousand injuries and disappointments which he imagines he has met with from the injustice of his enemies, or from the perfidy and ingratitude of his friends, that he begins at last to find that wealth and greatness are mere trinkets of frivolous utility.”

Intimations of Thoreau

I cannot read the above passages without thinking 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 before 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 suggest 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 expressed there.

I would like to suggest, though, that the writings of Smith in The Wealth of Nations and The Theory of Moral Sentiments are not as inconsistent as they might appear to be. Indeed, I would like to suggest that those who claim that they are inconsistent 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; instead, it is his job to tell us how best to do this, once we have decided it is worth accomplishing. Likewise, 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 philosopher 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 remarkable array of kitchen gadgets, and Adam Smith, in his role as philosopher, telling us that kitchen gadgets 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, besides 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 interest in acquiring kitchen gadgets and instead found themselves driven to learn advanced topology, our capitalist system would likely respond by taking steps to put advanced topology into the hands (or rather, the minds) of the masses. Similarly, if enough Americans decided to take after Thoreau and abandon their spacious homes in favor of huts in the woods, they would find the capitalist system amenable to their ends.

Of course, capitalism in a society with Thoreauvian values would be quite unlike the capitalism we know in our society. It is unlikely that the resources of that society would be devoted to building 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-materialistic utterances in The Theory of Moral Sentiments 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 socialism with anti-materialism. A socialist can consistently 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 societies failed to deliver the material goods they promised in the past. Just as it is possible for a capitalist to ridicule Americans’ obsession with acquiring cars, houses, and kitchen gadgets, it is possible 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 well-being. Capitalists everywhere would do well to take this lesson to heart and to keep in mind the other side of Adam Smith.