Adam Smith: Myths and Realities

adam smith "speaking of smith"

Maria Pia Paganelli for AdamSmithWorks

August 27, 2020
Myth 6: Markets Dehumanize People

Sometimes one hears criticisms of markets as allegedly presented by Adam Smith because these markets dehumanize human beings. The dehumanization may be the result of a sort of commodification of human beings who are now forced to sell their labor as if human labor were apples or sofas. 

But for Smith the ability to sell our labor to buy someone else’s labor is exactly what humanizes us, not what dehumanizes us.

Humans have an innate propensity truck, barter, and exchange. This is a propensity that only humans have. Animals do not trade. They do not make a fair and deliberate exchange, according to Smith. Only humans do. Trading is therefore that which makes us human, that which distinguishes us from other kinds of animals. 

But there is more to buying and selling than that. For me to buy my dinner, I have to convince the butcher, the baker, and the brewer that I can give them something that they want if they give me what I want. To do it, I will have to talk to them, to treat them as my peers. And they have to treat me as their peer too. I give them something, they give me something. We deal from the same level. We are equal.

What is the alternative to buying dinner, according to Smith? A beggar may hope to receive dinner by relying on the benevolence of others. How successful the beggar is may be questionable, but at least they can try and hope for it. A puppy will get its dinner too. The dog will get its dinner; it will get it from its master. And it will do it by fawning.   

So if we do not buy our dinner, we can beg for it, or we can behave like dogs. 

Which situation dehumanizes us the most? Having to beg a master like a dog with servile flattery, or offering something to someone who has to recognize me as their peer to accept my offer?

Markets, by the very nature of exchange, bring people to the same level, give people equal dignity. Rather than de-humanizing us, markets humanize us.


Read our previous #SmithMyths:
Shanon FitzGerald

This is a great treatment of an unfortunately persistent myth. I wonder, however, if the humanizing element of markets might owe at least something to values, customs, or attitudes that are independent of, and possibly prior to, the market... can't culture at least partially shape the degree to which markets act as a social leveler? Couldn't mutually beneficial exchange still take place in a context where the overall social status of each participant is still pretty clear, and even clearly hierarchical? This is not at all to discredit the humanizing arguments in favor of markets (or the fact that they are facilitating mutual benefit), only to query where there might be limits... but thank you again to the author for prompting thought here!