This column follows on from last week's column, `Luddite or realo?'

Last week within the context of the social control of selfishness, I discussed the role of the Church and how it was undermined by the Protestant Reformation, and about Adam Smith as one of the new thinkers of the 18th century who theorised the market operating inside clear social boundaries. I then looked at the underpinning of Enlightenment selfishness, and demonstrated how the three underpinning ideas have disappeared. This column expands further on Smith, because his was and is an important argument for understanding capitalist development.

But first a correction, or expansion. Last week's column included this: "Firstly, with a democratic state imposing the "public good" of electors' choice, the moral element disappears completely. When each person has one vote, then each person's views are equally weighty - whether they are selfish pricks or communitarians to the core. The notion of public good when there's no absolute moral authority to make the calls disappears into a morass of confusion, from which we have yet to emerge."

When I wrote that, it was as part of the argument with respect to the demise of spiritual authority over life. I do not mean that democratic societies are incapable of making moral choices. We do make moral choices! Look at the welfare state for example; in New Zealand, Michael Joseph Savage described it as `applied Christianity'. We pursue to some extent an ethical foreign policy, though that has been eroded by the recent fetish with free trade. Our society is capable of making ethical choices via the ballot box; but that fact does not dilute the complementary fact that this morality must be within and around the community. In a democratic state morality must be intrinsic in the people. It is not imposed from above. So, unlike the totalitarian Catholic world, we cannot simply assume the authorities will pursue `decent' goals. They only do so if a `decent' populace gives a democratic mandate to `decent' politicians (if such a concept isn't an oxymoron!).

But back to Smith. "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." (Wealth of Nations, Chapter II) A direct quote. How can you get any more obvious than that, you might ask? It is true that Smith demonstrated, with clever language like the above, the general benefits that the market can bring. It's also true that by worshipping competition and demonising monopoly, Smith promoted a system in which consumers would be unequivocally better off than before.

What annoys me though is the fact that this argument is continually taken out of context and applied as some sort of universal rule for today. Smith himself was keenly aware of the context in which this free market had to operate. As mentioned last week, the `Theory of Moral Sentiments' was his first work - and it made him the pre-eminent moral philosopher of the 18th century. Smith was a professor of moral philosophy at Edinburgh University, not an economist. His assumptions about the perfectly competitive marketplace, unleashing selfishness to the benefit of all, was set in a belief in `human heartedness' as the primary moral sentiment driving humanity. He believed, perhaps optimistically, that people were essentially decent at heart, and would seek to run their lives in a moral and pro-social way. He contrasted this with the morals of children, who he described as having selfishness as their primary moral sentiment. As people grew and matured, Smith believed, they would come to a pro-social position - and that this would be shaped by the bonds of community, the social institutions people mature in.

One does not see this kind of thing in right wing `interpretations' of Smith today. His view that the judgements of a stable community would ensure that this `human heartedness' stayed alive as the primary moral sentiment driving people's actions. If people became too selfish, and broke the established code, then they would be ostracised and excluded from the community. Such a fate would not be welcome, and this would be a powerful constraint on misbehaviour.

This primary work, the Theory of Moral Sentiments, is the context in which Smith must be read. And it is the way this larger community framework has changed that means one must take Smith's conclusions in `Wealth of Nations' with a keen awareness of context. Smith did not - could not - foresee the changes the industrial revolution would have on social structures and the stability of communities. It is intuitive that once that social order began to break down, it would be more dangerous to liberate the selfishness of the marketplace than before. If people no longer operated under social constraints that limited their selfishness to tolerable limits in the marketplace, then one must find other ways to limit it.

Smith himself recognised this in his later work. The Enclosures movement (enclosing and privatising former commons land) and slow industrialisation meant a drift to the cities. Urban areas do not exhibit the kinds of social constraints Smith had theorised earlier in the 18th century. His response, writing at the end of his life and never completed, were his `Lectures on Jurisprudence'. Recognising that some restriction on selfishness was essential if society was to be able to tolerate the market as a way to organise production, Smith turned to the law.

Law, of course, is the creation of the State. And it is in law that the democratic state of Smith's time and ours sets out its moral values. Things like Factory Acts, rights to organise unions and later employment law, minimum codes of conduct for employers, health and safety legislation, laws against monopoly and cartels and others are all examples of using the law to constrain selfishness. Income taxes raised progressively are a moral judgement which says that the rich should pay more than the poor to ensure all have a decent style of life no matter what the market says they are worth. It is indeed possible for morals to survive the democratic era; the difference being today's morals (and the ones Smith was writing about), while they may be based on Christian thought, are secular in orientation and application.

So there you have Smith in all his quite impressive glory. It is an entirely different picture to that some on the right would paint of him, but my version is the truth of it. If you don't agree, consult his writing yourself and see what arguments you can come up with. Smith is a perfect example of a cardinal rule all political thinkers should note: never, ever take someone's thoughts without understanding the context those thoughts arose in. If you do, you are likely to make a fool of yourself.

Till next week,

Jordan Carter carters@ihug.co.nz -- Jordan Carter Auckland, New Zealand

Freedom, Justice and Solidarity

On The Left - http://crash.ihug.co.nz/~carters/jtc/pols.html

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