Stairway to Better: Adam Smith as a Guide to the Evolution of Political Order

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May 15, 2024
We want to approach Smith’s ideas by engaging in thought experiments in which we strive to think as Adam Smith thought, rather than to celebrate or castigate this or that sliver of his thinking. But about which aspects of his thought should we think? 
The world Adam Smith left behind upon his death in July 1790 is, in many important respects, so vastly different from our own that, nearly a quarter of a millennium later, it seems necessary to approach Smith’s thought by first defining how the ideas of this singular eighteenth-century Scotsman might best be utilized by those inhabiting the twenty-first. This is particularly so if one is primarily interested, as I am, in applying a Smithian way of thinking to contemporary and emergent human challenges.
Jerry Muller captures both the dilemma of historical relevance and the preferred path out of that a priori dilemma when he writes, “To highlight the timelessness of Adam Smith’s work is to run the risk of anachronism, of wrenching his views out of their historical context; to ignore its timeliness is to reduce the study of his thought to antiquarianism. Those who regard Smith as a patron saint often fail to think like Adam Smith because they are quite satisfied to like what Adam Smith thought (or more often, what they suppose him to have thought). Trying to find what is timely in Smith by thinking as Smith thought is a less certain but potentially more rewarding enterprise.”1
The net benefit derived from accepting the cost of the added uncertainty, in other words, makes this a favorable bargain. We want to approach Smith’s ideas by engaging in thought-experiments in which we strive to think as Adam Smith thought, rather than to celebrate or castigate this or that sliver of his thinking. But about which aspects of his thought should we think?
The answer, it seems to me, is essentially all those aspects of Adam Smith’s abundant and multifaced thought that help us work through the particular thought-experiments we wish to undertake. That is as copious a pool of potential subjects as there are thought-experiments for the social scientist to engage in and explore. In The Theory of Moral Sentiments (TMS) – in effect Smith’s first and last book – in An Inquiry into the Nature and Causes of the Wealth of Nations (WN), in the Lectures on Jurisprudence (LJ) and in the pervasive interdependencies between the three sets of texts, rests a vast and varied repository of ideas, of perspectives, of modes of viewing. Collectively, they provide few specific prescriptions for concrete action in the twenty-first century, but they do offer something no less valuable: a treasure trove of lenses, sober and instructive, through which to be guided by Smith in an analysis of the social world. The remainder of this essay attempts to peer through some of those lenses at a subject Smith himself was deeply interested in – namely the possibility of human betterment through the evolution of (on balance) preferable social and political orders.
We know Smith was deeply interested in this subject – and believed his audience would be as well – because in TMS he repeatedly made it the central selling point in advertising his future books. In fact, in the “Advertisement” to the final edition of TMS, Smith recollected the promise he had made in earlier editions, “to give an account of the general principles of law and government, and of the different revolutions they have undergone in the different ages and periods of society”. The Wealth of Nations itself, he stated, would constitute one part in fulfillment of that grand intellectual project.2
We also know that an historical-institutional research program – one containing a view of society, government, economics, and law as evolutionary processes – was central to Smith’s quest for an overarching moral philosophy.3 The lion-share of the LJ is dedicated to tracing the origins and historical development of legal and political institutions gradually accruing to what Smith called “civilization” – composed notably of free labor, commerce, political liberty, and the higher arts. Similarly, in the LJ and WN, Smith presented a four-stage theory of history, which, while distinctly not an argument for economic determinism or historical unilinearity, represents an account of broadly evolutionary economic, social, and political development: The Age of Hunters; Age of Shepherds; Age of Agriculture and, finally the Age of Commerce. The stark contrast Smith sets up between the first and last of his four stages – between living conditions in “savage nations of hunters and fishers” and those in the “civilized and thriving nations” of commercial society4 – serves to illustrate his belief in a broadly evolutionary, developmental dynamic of social and political orders.
Smith is first and foremost a social philosopher concerned with the historical evolution of social and political orders. Indeed, we can understand TMS and WN as two complementary sets of arguments – one social/moral and the other economic/material – directed towards ascertaining the mechanisms by which natural human propensities were molded into distinctive types of sociopolitical orders – or modes of collective human existence – by historically shifting economic, cultural, legal, and governance structures.
Both sets of arguments contain a deep normative commitment to egalitarian human betterment and a cry against the waste of God-given human potential by suboptimal structures. As such, WN can be read as a call for policy-makers (what Smith called “legislators”) to pursue economic policies that would generate sufficient revenue for a thriving state and achieve “universal opulence” for its people. In parallel, TMS is concerned with the definition of virtue, the encouragement of virtuous conduct, and the means by which innate human tendencies institutions might channel toward individually and socially creative outcomes.
Smith’s preoccupation with the shifting nature of orders – and with what Nathan Rosenberg called the “moral capital” gained or lost by the patterns of human behavior that different orders impose upon self-interested human beings5 – is at least as relevant today as it was in the late eighteenth-century. The fundamental human need for physical and ontological security has, for millennia, spurred human beings to form social and political structures that transcend small kin-based circles of spontaneous sympathy in favor of more militarily powerful, wealthy, but still meaningful ones. Orders – which can be local, national, regional, or international – are attempted solution-structures to that fundamental need. They are systemic configurations of authority that provide (with varying degrees of success and durability) physical and ontological security through authoritative, and ultimately coercive, social arrangements that possess legitimacy by virtue of their perceived consonance with some shared vision of the good.
Within his four-stages of history framework, Smith was particularly interested in the causes and consequences of transition from the agricultural to the commercial stage. It is his discussion of this transition that yields some of the most instructive lenses through which to think about the evolution of orders.
Several themes stand out here: One is that not all ages are morally equal. On balance, great benefits emerged from the great transformation from feudal to commercial society. Many more humans acquired much improved lives across multiple measures of human wellbeing. The mechanism by which this occurred was the channeling of individual propensities and passions, through institutions, to produce materially and morally beneficial outcomes. The transition brought “order and good government, and with them, the liberty and security of individuals” to “the inhabitants of the country, who had before lived almost in a continual state of war with their neighbours, and of servile dependency upon their superiors.”6
The stairway to better really is better, in terms of individual security, prosperity, and liberty. The stairway elevates human survival, dignity, and flourishing. And these are not merely material gains, but moral ones. For Smith, human security and wealth are prerequisites for sympathy and concern for others. Benevolence, politeness, and public spiritedness are all enhanced by the advantages offered by more advanced orders.
But to think as Smith thought is to immediately add the question: At what cost? What is lost in the transformation? This is not to diminish by one iota the overwhelming benefits derived from the transition from the earlier order to the newer one, but it is to anticipate, acknowledge, and prepare to manage what is lost. It is to think through what is likely to endure in periods of order-transformation, and what will be swept away. It is also to try to compensate for what was valuable, and now irredeemably lost, with alternative social arrangements and political institutions.
Smith identifies at least two sets of losses that are, mutatis mutandis, central to our twenty-first century concerns. The first has to do with the impact of changing technologies on human capacity and agency; the second with the dangers inherent in the breakdown of close-knit social bonds – especially the family – as the result of commercial society’s drift towards secularism and impersonal social and market interactions (what Karl Popper, among others, would later identify as the risks of atomization, alienation, and nihilism associated with the “abstract society”).
In book V of the WN, Smith points to a pernicious byproduct of the growing division of labor in commercializing society. Without diminishing from its productivity-enhancing benefits, which he explores in book I, Smith unflinchingly confronts the debilitating effects on human vitality and agency that the same transformation produces for many. The passage is a starkly pragmatic recognition of the risks inherent in times of order-transition, but it is also a statement of confidence in the ability of political institutions to ameliorate the destructive byproducts of tumultuous transformations. It is a statement worthy of extensive quotation and reflection for twenty-first century audiences concerned with the effects of automation, Artificial Intelligence (AI), and other potential sources of human redundancy:
In the progress of the division of labour, the employment of the far greater part of those who live by labour, that is, of the great body of the people, comes to be confined to a few very simple operations, frequently to one or two. But the understandings of the greater part of men are necessarily formed by their ordinary employments. The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. Of the great and extensive interests of his country he is altogether incapable of judging, and unless very particular pains have been taken to render him otherwise, he is equally incapable of defending his country in war. The uniformity of his stationary life naturally corrupts the courage of his mind, and makes him regard with abhorrence the irregular, uncertain, and adventurous life of a soldier. It corrupts even the activity of his body, and renders him incapable of exerting his strength with vigour and perseverance in any other employment than that to which he has been bred. His dexterity at his own particular trade seems, in this manner, to be acquired at the expense of his intellectual, social, and martial virtues. But in every improved and civilised society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it.7
The second set of losses identified by Smith pertain to the impact of commercialization on social bonds, particularly that of the family (which Smith identified as the most immediate, intimate, and formative institution of individual identity and behavior). In part VI of TMS – in an observation that foreshadows twenty-first century critiques of liberalism – Smith identifies commercialization as triggering the loss of certain functions previously performed by familial (or tribal) social units. That loss, he again highlights, frees individuals to pursue new and beneficial activities, but also transfers dependencies from older, more organic institutions, to the state: “In pastoral countries, and in all countries where the authority of law is not alone sufficient to give perfect security to every member of the state”, Smith writes, “all the different branches of the same family commonly chuse to live in the same neighbourhood as one another. Their association is frequently necessary for their common defence…Their concord strengthens their necessary association; their discord always weakens and might destroy it.”8 Transition to the more advanced order provided by commercial society strengthens and expands the state, weakening the motivation of tribal self-defense, and so corrodes long-established social bonds. As a result “regard for remote relations becomes, in every country, less and less, according as this state of civilization has been longer and more completely established.”9
As the extended family unravels, Smith warns, even the most intimate bonds of the nuclear family are at risk, with unhappy moral consequences. The transference of tribal security functions to the impersonal state, for instance, manifests itself in the practice of sending children away from home – and family – to be educated by “distant great schools”. Without the habituation of close social contact with parents and siblings, Smith warns, acquiring the habits of duty, propriety, sympathy and self-restraint becomes compromised. “Surely no acquirement, which can possibly be derived from what is called a public education, can make any sort of compensation for what is almost certainly and necessarily lost by it. Domestic education is the institution of nature; public education, the contrivance of man.”10
The danger of such loss is crucial to Smith’s scheme because it is intimately linked to the acquisition of the habits of individual liberty. Indeed, Smith’s conception of personal freedom is not one of freedom from extraneous control (by state or society), but one of institutionally fostered self-control. That freedom, Smith emphasized, is acquired from dense embedded interactions within social institutions, particularly the family.
Regarding both sets of losses, to think as Smith thought is to confront the centrality of unintended consequences inherent in order transitions. Great transformations, Smith warns us, will entail multiple unforeseen surprises – some pleasant, others dire, others still just plain weird – reverberating through and across our social world. We cannot predict them so cannot prevent them from transpiring or foresee their consequences for individuals or societies. Yet we can expect that the unexpected will occur, and that we will need to adjust our social and political arrangements to manage their effects.
Another Smithian lens through which we can usefully peer is the fallacy of order-durability. Axiomatic assumptions and beliefs; seemingly fixed economic interests and immutable social arrangements; political institutions that appear eternally stable – all are largely fluid and subject to replacement when self-interested human beings precipitate unintended cascades of change.
True, for Smith certain fundamental human inclinations – such as the propensity towards sympathy or the satisfaction derived from exchange for value (the human proclivity to truck, barter, and trade) – may well carry across orders, from older to newer ones. But the form, scale, and types that these more enduring human propensities tend to assume in more advanced orders are ones that inhabitants of earlier orders would have gasped at, dismissed as heretical, or found utterly incomprehensible. It is one thing to barter colorful seashells within an extended neolithic tribe, quite another to globally trade Ethereum cryptocurrency on an open-source blockchain platform.11
In examining the transition from agricultural to commercial societies, for example, Smith highlights the transformation to have involved the removal of shackles of authority previously thought unassailable, but not the disappearance of authority itself. One systemic configuration of authority was replaced by another. The political power of the feudal lords and, particularly, that of the medieval “Church of Rome” – which Smith evocatively describes as “the most formidable combination that ever was formed against the authority and security of civil government, as well as against the liberty, reason, and happiness of mankind…” – were removed, allowing mankind to “flourish”.12
Yet this entailed the parallel rise of a new, unexpected and unplanned, mode of authority – the modern state. Smith saw this as a transition unambiguously favorable to liberty, but he failed to envisage – and perhaps could not have envisaged – the more omnipotent and murderous forms that Leviathan would take a century and a half after his death. He did not imagine the totalitarian state’s impact on the human soul, as captured, for example, by Stefan Zweig shortly before his death in 1942:
The Russians, the Germans, the Spanish, none of them know how much freedom and joy that heartless, voracious ogre the State has sucked from the marrow of their souls. The people of all nations feel only that an alien shadow, broad and heavy, looms over their lives. But we who knew the world of individual liberties in our time can bear witness that a carefree Europe once rejoiced in a kaleidoscopic play of variegated colors. We tremble to see how clouded, darkened, enslaved and imprisoned the world has now become in its suicidal rage.13
The lesson for us here is twofold. First, that in exiting the commercial age in favor of… (what? a digital one?) norms and institutions that we currently consider fundamental and unchanging will be swept away. And second, that within that impermanence there is an underlying permanence in the building blocks of political orders. They all require sources of power and involve the management of coercion. They all seek, and are dependent upon, some form of legitimacy. They all entail rules, conventions, and institutions meant to maintain, preserve, and adapt their order. They all constitute attempted solution-structures to the perennial human need for physical and ontological security.
Lastly, Smith’s analysis of agricultural society comes largely after his analysis of commercial society. This is both a reminder of the non-linearity of history and a warning against complacency. The arc of the historical, Smith alerts us, can bend towards human betterment, but the path towards that betterment is uncertain and reversible. It was in Greece and Rome that early commercial societies emerged, yet both were destroyed by enemy-societies existing on the lower ranks of the stairway to better. It is only free and responsible individuals that can truly serve as the custodians of the staircase to better.


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References
  1. Jerry Z. Muller, Adam Smith In His Time and Ours (Princeton University Press, 1993) p. 197. Italics in the original.
  2. Amartya Sen, Introduction, in Adam Smith, The Theory of Moral Sentiments (Penguin Classics, 2009) p. ix.
  3. For a detailed discussion see: Charles M. A. Clark, “Adam Smith and Society as an Evolutionary Process”, Journal of Economic Issues, 24/3 (September 1990), pp. 825-844.
  4. WN, Introduction, paragraph 4.
  5. Nathan Rosenberg, “Adam Smith and the stock of moral capital”, History of Political Economy 22(1) (1990), pp. 1-18.
  6. WN, III.iv.4.
  7. WN Book V.I.ii
  8. TMV.Part VI.ii.1
  9. Ibid.
  10. Ibid.
  11. I am grateful to Professor Brianne Wolf for challenging me to think about the question of what endures across orders and for pointing out that Smith believed certain human propensities to be enduring across time. The answer to this question, rightly or wrongly, is my own.
  12. WN, V.i.3
  13. Stefan Zweig, The World of Yesterday (1942) (University of Nebraska Press, 2013) p. 150.