The Philosophy Book
Page 20
Aged 16, he left for France and converted to Catholicism. While trying to make his name as a composer, he worked as a civil servant and was posted to Venice for two years, but on his return he began to write philosophy. His controversial views led to his books being banned in Switzerland and France, and warrants being issued for his arrest. He was forced to accept David Hume’s invitation to live in England for a short time, but after they quarrelled he returned to France under a false name. He was later allowed to return to Paris, where he lived until his death at the age of 66.
Key works
1750 Discourse on the Sciences and Arts
1755 Discourse on the Origin and Foundations of Inequality among Men
1755 Discourse on Political Economy
1762 The Social Contract
See also: Thomas Hobbes • John Locke • Edmund Burke • John Stuart Mill • Karl Marx • John Rawls
IN CONTEXT
BRANCH
Political philosophy
APPROACH
Classical economics
BEFORE
c.350 BCE Aristotle emphasizes the importance of domestic production (“economy”) and explains the role of money.
Early 1700s Dutch thinker Bernard Mandeville argues that selfish actions can lead indirectly to socially desirable consequences.
AFTER
1850s British writer John Ruskin argues that Smith’s views are too materialistic and therefore anti-Christian.
1940s onward Philosophers apply the idea of bargaining throughout the social sciences as a model for explaining human behavior.
Scottish writer Adam Smith is often considered the most important economist the world has ever known. The concepts of bargaining and self-interest that he explored, and the possibility of different types of agreements and interests—such as “the common interest”—are of recurring appeal to philosophers. His writings are also important because they give a more general and abstract form to the idea of the “commercial” society that was developed by his friend David Hume.
Like his Swiss contemporary, Jean-Jacques Rousseau, Smith assumes that the motives of human beings are partly benevolent and partly self-interested, but that self-interest is the stronger trait and so is a better guide to human behavior. He believes that this can be confirmed by social observation, and so, broadly speaking, his approach is an empirical one. In one of his most famous discussions of the psychology of bargaining, he contends that the most frequent opening gambit in a bargain is for one party to urge the other—“the best way for you to get what you want is for you to give me what I want.” In other words, “we address ourselves, not to [another’s] humanity, but to their self-love.”
Smith goes on to claim that the exchange of useful objects is a distinctively human characteristic. He notes that dogs are never observed exchanging bones, and that should an animal wish to obtain something, the only way it can do so is to “gain the favor of those whose service it requires.” Humans may also depend on this sort of “fawning or servile attention”, but they cannot resort to it whenever they need help, because life requires “the cooperation and assistance of great multitudes.” For example, to stay comfortably at an inn for a night we require the input of many people—to cook and serve the food, to prepare the room and so on—none of whose services can be depended on through good will alone. For this reason, “man is an animal that makes bargains”—and the bargain is struck by proposing a deal that appears to be in the self-interest of both parties.
The division of labor
In his account of the emergence of market economies, Smith argues that our ability to make bargains put an end to the once universal requirement that every person, or at least every family, be economically self-sufficient. Thanks to bargaining, it became possible for us to concentrate on producing fewer and fewer goods, and ultimately to produce just a single good, or offer a single service, and to exchange this for everything else we required. This process was revolutionized by the invention of money, which abolished the need to barter. From then on, in Smith’s view, only those who were unable to work had to depend on charity.
Everyone else could come to the marketplace to exchange their labor—or the money they earned through labor—for the products of other people’s labor.
This elimination of the need to provide everything for ourselves led to the emergence of people with particular sets of skills (such as the baker and the carpenter), and then to what Smith calls a “division of labor” among workers. This is Smith’s phrase for specialization, whereby an individual not only pursues a single type of work, but performs only a single task in a job that is shared by several people. Smith illustrates the importance of specialization at the beginning of his masterpiece, The Wealth of Nations, by showing how the making of a humble metal pin is radically improved by adopting the factory system. Where one man working alone would find it hard to produce 20 perfect pins in a day, a group of 10 men, charged with different tasks—from drawing out the wire, straightening it, cutting it, pointing it, and grinding it, to joining it to a pinhead—were able, in Smith’s time, to produce over 48,000 pins a day.
Smith was impressed by the great improvements in the productivity of labor that took place during the Industrial Revolution—improvements that saw workers provided with much better equipment, and often saw machines replacing workers.
The jack-of-all-trades could not survive in such a system, and even philosophers began to specialize in the various branches of their subject, such as logic, ethics, epistemology, and metaphysics.
The market is the key to establishing an equitable society, in Smith’s view. With the freedom provided by the buying and selling of goods, individuals can enjoy lives of “natural liberty.”
"The greatest improvement in the productive powers of labor seem to have been the effects of the division of labor."
Adam Smith
The free market
Because the division of labor increases productivity and makes it possible for everyone to be eligible for some kind of work (since it frees us from training in a craft), Smith argues that it can lead to universal wealth in a well-ordered society. Indeed, he says that in conditions of perfect liberty, the market can lead to a state of perfect equality—one in which everyone is free to pursue his own interests in his own way, so long as it accords with the laws of justice. And by equality Smith is not referring to equality of opportunity, but to equality of condition. In other words, his goal is the creation of a society not divided by competitiveness, but drawn together by bargaining based on mutual self-interest.
Smith’s point, therefore, is not that people should have freedom just because they deserve it. His point is that society as a whole benefits from individuals pursuing their own interests. For the “invisible hand” of the market, with its laws of supply and demand, regulates the amount of goods that are available, and prices them far more efficiently than any government could. Put simply, the pursuit of self-interest, far from being incompatible with an equitable society, is, in Smith’s view, the only way of guaranteeing it.
In such a society, a government can limit itself to performing just a few essential functions, such as providing defense, criminal justice, and education, and taxes and duties can be reduced accordingly. And just as bargaining can flourish within national boundaries, so it can flourish across them, leading to international trade—a phenomenon that was spreading across the world in Smith’s time.
Smith recognized that there were problems with the notion of a free market—in particular with the increasingly common bargain of wages for working time. He als
o acknowledged that while the division of labor had huge economic benefits, repetitive work is not only boring for the worker, it can destroy a human being—and for this reason he proposed that governments should restrict the extent to which the production line is used. Nevertheless, when The Wealth of Nations was first published, its doctrine of free and unregulated trade was seen as revolutionary, not only because of its attack on established commercial and agricultural privileges and monopolies, but also because of its argument that a nation’s wealth depends not on its gold reserves, but on its labor—a view that went against all economic thinking in Europe at the time.
Smith’s reputation for being a revolutionary was bolstered during the long debate about the nature of society that followed the French Revolution of 1789, prompting the mid-Victorian historian H.T. Buckle to describe The Wealth of Nations as “probably the most important book that has ever been written.”
Smith’s legacy
Critics have argued that Smith was wrong to assume that the “general interest” and “consumer interest” are the same, and that the free market is beneficial to all. What is true is that even though Smith was sympathetic toward the victims of poverty, he never fully succeeded in balancing the interests of producers and consumers within his social model, or integrating into it the domestic labor, performed mainly by women, that helped to keep society running efficiently.
For these reasons, and with the rise of socialism in the 19th century, Smith’s reputation declined, but renewed interest in free market economics in the late 20th century saw a revival of Smith’s ideas. Indeed, only today can we fully appreciate his most visionary claim—that a market is more than just a place. A market is a concept, and as such can exist anywhere—not only in a designated place such as a town square. This foreshadows the kind of “virtual” marketplace that only became possible with the advent of telecommunications technology. Today’s financial markets and online trading bear witness to Smith’s great vision.
"Civilized society stands at all times in need of the cooperation and assistance of great multitudes."
Adam Smith
The production line is an incredible money-creating machine, but Smith warns against the dehumanizing effects it can have on workers if it is used without regulation.
ADAM SMITH
The “father of modern economics” was born in Kirkcaldy, Fife, in 1723. An academic prodigy, Smith became a professor first at Edinburgh University, then at Glasgow University where he became a professor in 1750. In the 1760s, he took a lucrative job as a personal tutor to a young Scottish aristocrat, Henry Scott, with whom he visited France and Switzerland.
Already acquainted with David Hume and other Scottish Enlightenment thinkers, he seized the chance to meet leading figures of the European Enlightenment as well. On his return to Scotland, he spent a decade writing The Wealth of Nations, before returning to public service as Commissioner of Customs, a position that allowed him to advise the British government on various economic policies. In 1787, he rejoined Glasgow University, and spent the last three years of his life as its rector.
Key works
1759 The Theory of Moral Sentiments
1776 The Wealth of Nations
1795 Essays on Philosophical Subjects
See also: David Hume • Jean-Jacques Rousseau • Edmund Burke • Karl Marx • Noam Chomsky
IN CONTEXT
BRANCH
Metaphysics
APPROACH
Transcendental idealism
BEFORE
1641 René Descartes publishes his Meditations, in which he doubts all knowledge apart from the knowledge of his own consciousness.
1739 David Hume publishes his Treatise of Human Nature, which suggests limitations on how the human mind perceives reality.
AFTER
19th century The German idealist movement develops in response to Kant’s philosophy.
1900s Edmund Husserl develops phenomenology, the study of objects of experience, using Kant’s understanding of consciousness.
Immanuel Kant thought it was “scandalous” that in more than 2,000 years of philosophical thought, nobody had been able to produce an argument to prove that there really is a world out there, external to us. He particularly had in mind the theories of René Descartes and George Berkeley, who both entertained doubts about the existence of an external world.
At the start of his Meditations, Descartes argued that we must doubt all knowledge except that of our own existence as thinking beings—even the knowledge that there is an external world. He then went on to counter this sceptical point of view with an argument that claims to prove the existence of God, and therefore the reality of an outside world. However, many philosophers (including Kant) have not found Descartes’ proof of God to be valid in its reasoning.
Berkeley, on the other hand, argued that knowledge is indeed possible—but that it comes from experiences our consciousness perceives. We have no justification for believing that these experiences have any external existence outside our own minds.
Time and consciousness
Kant wants to demonstrate that there is an external, material world, and that its existence cannot be doubted. His argument begins as follows: in order for something to exist, it must be determinable in time—that is, we must be able to say when it exists and for how long. But how does this work in the case of my own consciousness?
Although consciousness seems to be constantly changing with a continuous flow of sensations and thoughts, we can use the word “now” to refer to what is currently happening in our consciousness. But “now” is not a determinate time or date. Every time I say “now”, consciousness is different.
Here lies the problem: what makes it possible to specify the “when” of my own existence? We cannot experience time itself, directly; rather, we experience time through things that move, change, or stay the same. Consider the hands of a clock, constantly moving slowly around. The moving hands are useless for determining time on their own—they need something against which they change, such as the numbers on a clock face. Every resource I have for measuring my constantly changing “now” is found in material objects outside me in space (including my own physical body). Saying that I exist requires a determinate point in time, and this, in turn, requires an actually existing outside world in which time takes place. My level of certainty about the existence of the external world is thus precisely the same as my level of certainty about the existence of consciousness, which Descartes believed was absolutely certain.
According to Kant, we can only experience time through things in the world that move or change, such as the hands of a clock. So time is only ever experienced by us indirectly.
The problem of science
Kant also looked at how science understood the exterior world. He admired the awesome progress that the natural sciences had made over the previous two centuries, compared with the relative stagnation in the subject from ancient times until that point. Kant, along with other philosophers, wondered what was suddenly being done correctly in scientific research. The answer given by many thinkers of the period was empiricism. The empiricists, such as John Locke and David Hume, argued that there is no knowledge except that which comes to us through our experience of the world. They opposed the views of rationalist philosophers, such as Descartes or Gottfried Leibniz, who argued that the mind’s ability to reason and deal with concepts is more important for knowledge than experience.
The empiricists claimed that the recent success of science was due to scientists being much more careful in their observations of the world t
han they had been previously, and making fewer unjustified assumptions based on reason alone. Kant argues that although this is no doubt partly true, it could not be the whole answer, as it is simply false to say that there was no detailed and careful empirical observation in science before the 16th century.
The real issue, Kant argues, is that a new scientific method arose that made empirical observations valuable. This method involves two elements. First, it asserts that concepts such as force or movement can be perfectly described by mathematics. Second, it tests its own conceptions of the world by asking specific questions about nature and observing the answers. For example, the experimental physicist Galileo Galilei wanted to test the hypothesis that two things of different weights will nevertheless fall through the air at the same rate. He designed an experiment to test this in such a way that the only possible explanation of the observed result would be the truth or falsity of the hypothesis.
Kant identifies the nature and importance of the scientific method. He believes that this method had put physics and other subjects on the “secure road of a science.” However, his investigations do not stop there. His next question is: “Why is our experience of the world such that the scientific method works?” In other words, why is our experience of the world always mathematical in nature, and how is it always possible for human reason to put questions to nature?