Adam Smith, Inclination, and Need: A Re-interpretation of Self-Interest
Catherine Pakaluk for AdamSmithWorks
By Andrea Vanni - freeforumzone.leonardo.it, Public Domain, https://commons.wikimedia.org/w/index.php?curid=6926007
August 19, 2020
August 19, 2020
Soon after the 1759 publication of Adam Smith’s Theory of Moral Sentiments (TMS), David Hume reported in correspondence to Smith the “melancholy news” that
the mob of literati are beginning already to be very loud in its praises. Three Bishops called yesterday at Millar’s shop in order to buy copies, and to ask questions about the author. The Bishop of Peterborough said he had passed the evening in a company where he heard it [TMS] extolled above all books in the world.1
The coy Mr. Hume teased his dear friend Smith, saying that since “nothing indeed can be a stronger presumption of falsehood than the approbation of the multitude,”… “your book has been very unfortunate; for the public seems disposed to applaud it extremely.”
Whether or not Smith sought to supplant prior doctrines for practical morality or merely to augment the moral reasoning of his predecessors, a debate not likely to be settled, we may observe without risk that it would be difficult to find three bishops anywhere, of any creed, who presently regard Adam Smith as a source of moral wisdom. In the common estimation, and largely thanks to certain superficial popularizations of his thought (Robert Heilbroner, for instance),2 Smith is now regarded as an apologist for “a stupendous palace erected upon the granite of self-interest” as George Stigler famously remarked.3
Many scholars have labored to replace the strawman of Smith-as-utilitarian with a deeper, more accurate portrait of the philosopher-economist and his attitudes regarding human motivation and self-interest. Sam Fleischacker, author of On Adam Smith’s Wealth of Nations: A Philosophical Companion [Princeton: Princeton University Press, 2004] notes, for instance, that
Everything Smith says about the importance of self-interest is quite humdrum, for his day: he rejects Mandeville’s cynical reduction of all human motivations to self-interest, is a greater believer in the possibility of concern for others than Hume, allows more room for sincere religious faith than Voltaire, and differs barely at all from the gentle Hutcheson on the role of self-interest in economics.
And Paul Oslington, in his Introduction to Adam Smith as Theologian, asserts that although Smith is the “key figure in the formation of political economy,” his economic analysis is “part of a carefully constructed system encompassing moral philosophy, jurisprudence, and philosophy of science.”4 Oslington argues that
Smith was sensitive to failings of human rational and moral capacities, and argued for institutions which take account of these failings. …When invoking Smith in contemporary debates we need to be aware of the theological ideas that were woven into his thought—especially the assumptions of divine creative and providential activity, and progression toward a harmonious and happy end. (10)
Presumably, Smith was received by the Bishops and moral philosophers of his day as writing from just this vantage point, whether about practical morality or about the causes of the wealth of nations.
I wish here to consider the role of self-interest in Smith’s treatment of providential activity by taking up the iconic butcher-brewer-baker passage, and to contrast it with a medieval Christian text which has not been introduced into Smith scholarship (to this author’s knowledge). After providing some exposition, I will raise the question of whether Smith’s reliance on self-interest bears a reformulation after the style of this earlier text, with implications for the relationship between Smith’s thought and Christian social philosophy.
One for All, All for One
Adam Smith is unrelentingly fascinated by a phenomenon of the natural order by which, he observes, individuals are induced by inclination or tendency to activities which serve—at the same time—the survival of the individual and the flourishing of the species. He writes:
Nature has directed us to the greater part [of these] by original and immediate instincts. Hunger, thirst, the passion which unites the two sexes, the love of pleasure, and the dread of pain, prompts us to apply those means for their own sakes, and without any consideration of their tendency to those beneficent ends which the great Director of nature intended to produce by them (TMS II.i.5.10)
These self-regarding ‘instincts,’ as Smith understands them, need not be mere animal ‘urges’—they may be apprehended as reasonable and pursued in a range of contexts, from simple to complex, as in human institutions like marriage (inclination to reproduce) or the legal system (inclination to seek justice). Note that in each case, because there is an inclination, or a tendency, the activity has the character of satisfying an interest of the self, or self-interest. But the tendency itself, to reproduce sexually, or to seek justice, is a characteristic which helps to define the animal in question, and can’t be reduced to self-interest which is minimally common to all tendencies or inclinations.
Smith further observes the unintended (positive) ‘spillover’ or benefit from one to all (or from one to many) resulting from behaviors which satisfy inclinations: in some instances, the agreement between individual and social gain is immediate (as in reproduction), but in other cases it is less obvious to see how the private benefit accrues to the general welfare. It is to this exposition in the case of the wealth of nations that Smith devotes Book 1 of his treatise. There Smith aims to identify the corresponding, fundamental inclination at play in economic growth.
In this light, the butcher-brewer-baker passage from Book 1, Ch 2 of the Wealth of Nations deserves special attention:
In civilized society [man] stands at all times in need of the cooperation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons. In almost every other race of animals each individual, when it is grown up to maturity, is entirely independent, and in its natural state has occasion for the assistance of no other living creature.But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of.It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. (WN I.2) [Emphases mine.]
To assimilate the exchange behavior described to the type of “one for all” phenomena that Smith wants to establish, he proposes (in a passage prior to this one) as the fundamental inclination or tendency the “the propensity to truck, barter, and exchange one thing for another.”And he reminds us that this is a “propensity in human nature which has in view no such extensive utility,” that is, the “general opulence” (the wealth of nations) which arises from the division of labor. It is Smith, more than any other social philosopher, who highlights that this tendency to exchange is uniquely human. “Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog” (WN I.2).
Self-interest, or self-love, emerges in this passage in a merely ancillary fashion—almost as an afterthought. It is used by Smith to highlight the condition of ‘dependence’ in human beings that is contrasted with mature animals of other species who have no need of other animals to satisfy their material wants. Men in society, Smith says, are “at all times in need” and in “almost constant occasion” to require something from a fellow man (WN I.2). Self-love is only a pre-condition for exchange behavior, where the inclination to exchange, but not the characteristic self-love, are distinctive to human beings. Self-interest is shared by all animals, Smith makes clear: but civilized dependence is not. ( As Smith pointed out, and is no less true today, dependence tends to increase with economic growth, not decrease, because the number of wants are increased in proportion to the number and type of goods and services that are developed, and upon which people come to depend.) It is therefore the latter that markets serve—dependence, and not the former—self-interest.
On Smith’s account, then, commerce and markets under the right conditions institutionalize the human inclination to make trades, and these trades, quite apart from the intention of the traders, tend to grow the stock of capital over time. In the action of the one, or more properly, the two (minimal partners needed for an exchange), many benefit from the favorable development which comes from trade. At the same time, markets—as do other social institutions—reciprocate the one-for-all phenomenon. A healthy market is also all-for-one, coordinating the activities (and exchanges) of many hundreds or thousands of persons for the sake of satisfying the needs of the one.
It seems valuable here to compare Smith’s account with a medieval text that it is doubtful Smith would ever have seen: the “Treatise on Divine Providence” in Catherine of Siena: The Dialogue written in the year 1370. The Sienese Dominican tertiary lived from 1347-1380 and was regarded as a mystic and a saint by her contemporaries. She was canonized in the year 1461 and is most well-known for the role she played in bringing an end to the Avignon papacy. The Dialogue is a text believed to have been dictated by Catherine to secretaries while in the state of prayer. It contains treatises on Divine Providence, Discretion, Prayer, and Obedience. Although it seems that The Dialogue was translated into English by the late fifteenth century,5 such a profoundly Catholic text is unlikely to have been circulated in Anglican England or in Calvinist Scotland.
In a section of the “Treatise on Divine Providence,” in which the Sienese mystic argues that all goods and evils come into society mediated through human agency, The Dialogue describes the voice of God as saying:
I use the word temporal for the things necessary to the physical life of man; all [gifts] I have given indifferently, and I have not placed them all in one soul, in order that man should, perforce, have material for love of his fellow. I could easily have created men possessed of all that they should need both for body and soul, but I wish that one should have need of the other, and that they should be My ministers to administer the graces and the gifts that they have received from Me. Whether man will or no, he cannot help making an act of love. It is true, however, that that act, unless made through love of Me, profits him nothing so far as grace is concerned. See then, that I have made men My ministers, and placed them in diverse stations and various ranks, in order that they may make use of the virtue of love.6 [Emphases mine.]
One certainly finds in these passages of The Dialogue, and in Catherine’s thought more generally, strong echoes of the virtue-oriented Augustinian “liberalism” noted by Eric Gregory in his essay comparing Smith and Augustine.7 But what is most interesting for this discussion is the notion of a planned [by God] order of human dependence, in which neediness inclines people to ‘love’ of neighbor: “whether man will or no.” The nature of this ‘good’ dependence, on Catherine’s account, is that it makes every man into an agent of God’s Providence insofar as he supplies for others either temporally or spiritually. Thus, ‘man is a giving animal’ might be considered as a downstream, nonetheless powerful corollary to the Aristotelian ‘man is a rational animal’. Each dictum captures an aspect of human nature said to bear the image and likeness of God.
As a clarification, it seems worth pointing out that by ‘giving’ in the medieval passage above it is unlikely that Catherine meant some kind of non-market economy of exchange. Medieval Siena was renowned for its mercantile culture, especially in the cloth-trade (of which Catherine’s father was a member), and there is not a single passage in her works which is known to criticize market-behavior per se. A near contemporary of hers, Bernardine of Siena [1380-1444] is known today for some of the finest early passages on price and value, such as in his sermon “Why God hath given us a tongue”:
Lay up this example in thy mind: If thou art a shoemaker, a man cometh to thee: What price dost thou ask for these little shoes? I wish fifteen soldi for them. If thou givest them for less, thou hast not spoken with charity, and thou hast lied. Again: O shoemaker, make me a pair of good little shoes. He doth reply: I will make thee the best that may be found in Siena. If thou makest them not as thou hast said, thou art not one of those who belong to God.
While Catherine is primarily interested in spiritual matters, she often demonstrates how the supernatural is infused with the worldly in irreducible ways. This passage on “Divine Providence” seems to be just such a one. The most reasonable interpretation of the Sienese mystic’s emphasis on the interdependence of exchange is that Catherine wants to show how even normal, market behavior—in which we remedy each other’s needs—is replete with Divine energy and action, and we play a role, however unwittingly, in God’s plan for salvation even when we engage in mere market behavior.
There are several implications which arise from comparing this medieval text with Smith’s passages on the one-for-all and all-for-one arising from dependence in human affairs. First, the side by side comparison strengthens the claims by scholars like Eric Gregory and Michael Emmett Brady that certain early Christian themes are present in Smith’s thought. Second, it supports the idea that self-interest is not the critical concept for the Smithian one-for-all phenomenon since in the very similar passage from Catherine Benincasa, the effect is observed merely by attention to the unequal distribution of gifts in the divine administration of things. Third, the comparison with The Dialogue adds a level at which ‘unintended beneficence’ operates the one-for-all phenomenon. In the Smithian scheme, what is unintended is the general opulence which arises from exchange and trade; what is intended is merely the remedy for a particular neediness. Catherine’s schema adds that human agency, when deployed in satisfying for the needs of others, also serves as an instrument of God’s charity [Providence] and so what is additionally ‘unintended’ by the agent is to be the minister of God—thus to act in the ‘image’ of God.
These implications point to an important question about agency in the work of Divine Providence. The public choice tradition, for instance, deeply rooted in Smith’s thought, points out that governments often act from ‘self-interest’ leading to strong departures from best-possible outcomes. Catherine’s schema suggests another line of concern, which is whether impersonal bodies [governments, agencies] can also act as “ministers” of divine charity, or whether it is only individuals who can do so. If the latter, or if there is a strong presumption in favor of the latter, the medieval notion of ‘good’ dependence only strengthens the caution that a Smithian perspective might offer about the role of government in economic affairs.
Taken together, this interpretation of inclination and need in Smith—contrasted with the supporting medieval text—underscore the difficulty presented at the outset: that despite the fact that Smith was received by his contemporaries as a Christian thinker, Smith’s thought is not today considered for its ‘moral’ character, in large part because of the bloated importance given to the role of self-interest in various treatments of Smith’s work. The connection between Smith’s thought and the medieval text supplied here only strengthens the conundrum. Why has Smith been so tarnished as the patron saint of self-interest?
There are many answers to this question, the most painstaking of which involve tracing the history of ideas and the way in which Smith has been forgotten and rediscovered by successive generations who have employed Smith for their own purposes. (Oslington, Intro). But one answer may lie, paradoxically, with the success on its own terms of the project of British scientific natural theology that Smith was bound up with. British natural theology “sought knowledge of God through the study of nature,” but it also endeavored “to shift the theological focus for scientists away from issues which were the subject of sectarian controversy” (Oslington 16) Practically speaking, this meant a move to a more detached ‘descriptive’ science which made no consistent appeal to scripture, revelation or grace. This served to protect a certain sphere of British intellectual life at a time when the most bitter sectarian debates centered on exactly those things—scripture, revelation, and grace.
But at a critical juncture in the history of economic thought, the new and distinct field of political economy founded by Smith and his peers ultimately failed to take up a home within any particular Christian sect—Smith’s thought belonged to everyone as surely as it belonged to no one. For those convinced of the lasting importance of Smith’s work, there is a specifically religious project at hand: the reformulation of his key insights on robust metaphysical grounds, engaging very specific and sectarian doctrines on nature, but also on scripture, revelation and grace. While it may seem like an inferior task to ‘de-universalize’ Smith, history suggests the opposite: that the lasting energy of particular schools of thought has to do with their embeddedness within robust philosophical and theological commitments.
- David Hume, “The Letters of David Hume: Vol 1: 1727-1765”, ed. J. Y. T. Greig (Oxford University Press: 2011), 305.↩
- Robert Heilbroner, “The Worldly Philosophers: The Lives, Times And Ideas Of The Great Economic Thinkers,” 7th edition (New York: Simon & Schuster, 1999).↩
- George Stigler, “Smith’s Travels on the Ship of State,” in Essays on Adam Smith, eds. Andrew Skinner and Thomas Wilson (Oxford: Clarendon, 1975), 237.↩
- Paul Oslington, “Adam Smith as Theologian,” (New York: Taylor & Francis, 2011), 1.↩
- C. Annette Grise, “Holy Women in Print: Continental Female Mystics and the English Mystical Tradition,” in The Medieval Mystical Tradition in England: Exeter Symposium (Cambridge: D. S. Brewer, 2004), 86-87.↩
- Catherine of Siena, “The Dialogue” (Mahwah, NJ, Paulist Press, Inc. 1980), 38.↩
- Eric Gregory, “Sympathy and Domination: Adam Smith, Happiness, and the Virtues of Augustinianism,” in Paul Oslington, “Adam Smith as Theologian,” (New York: Taylor & Francis, 2011), 35-42.↩