When ideas become established as 'orthodox', that is ideas that almost everyone agrees with, two things follow:
Now, we live in an age where it is accepted that being selfish is very very bad. Everyone should care about other people in society. You should put your neighbour's interests before your own. You should love your neighbour enough to lay down your life for them.
What then should we do about Adam Smith's ideas about self-interest? It's not really possible to argue that he was just thick, so that leaves option two as the only avenue to get rid of the embarrassing nexus between self-interest and selfishness. This is why a huge amount of effort is expended by admirers of Adam Smith's philosophy in trying to explain that actually, he wasn't at all a selfish man and did not spend his entire life trying to persuade other people to be as selfish as possible.
Perhaps this effort is worthwhile, given that the 'invisible hand' metaphor has acquired a life greater than that of its author, and like all cliches it is open to misinterpretation. Presumably, without all the modern caveats about Mr Smith not being a selfish man, people would assume that the whole point of his 'invisible hand' idea is to say 'each man for himself and devil take the hindmost'. Throw the poor and hungry into the open market with no safeguards, and let them eat cake. In other words, it will be assumed that Smith's main lesson in the Wealth of Nations is: be as selfish as possible, look out for your own interests, and stab your neighbour in the back if it helps you to advance yourself.
That would admittedly be a rather nasty way to see the world, and so it is understandable that Mr Smith's admirers are so anxious to explain that really, this is not what the Wealth of Nations is about. Smith was actually quite a smart man, we are told, and a philosopher rather than a philistine. Moreover, it's not as if he was a New Yorker or from some other big city where it's ok to have a grasping personality; he was from Kirkcaldy. This proves that he must have been actually a very humane and likeable sort of person, quite humble, and not at all given to encouraging people to be vicious to one another. And so on it goes.
In writing about Adam Smith today it is therefore customary to begin by saying how personable and indeed admirable he was:
The only problem with the 'Mr Smith was actually a really nice man' modern expositions is that it falls right in with the modern phenomenon known as 'virtue signalling'. This entails making public statements about concern for the wellbeing of others, and loudly voicing noble and worthy sentiments, as a proxy for one's political views. So people who want to champion various social causes are very pleased to hear how nice Adam Smith was, because obviously this means he would have supported their social causes. This is why we are now informed that actually, Adam Smith was a Rawlsian, a progressive and indeed a Marxist.
There's a certain logic to this perspective: if that much energy is expended explaining that Smith wasn't selfish, he cared about the poor, he hated inequality, etc, then yes, he does begin to sound exactly like a Social Justice Warrior:
From this you can reassure yourself that Smith wasn't one of those neoliberals who oppose regulation just because they value freedom - it seems that Smith would be very happy to have more and more regulation, even if it ultimately strangled the market, as long as that regulation was intended to help the poor and was not intended to favour rich conglomerates [editor: with regulation, it's the intentions, not the outcomes, that matter most]. Wow, this is not what you thought the Wealth of Nations was about, is it. Luckily, it has been reinterpreted for you to make Smith's ideas more in keeping with modern tastes. In the modern era, nobody actually reads books, we just read summaries about them off the internet. So this kind of reinterpretation is surprisingly significant.
Thus, to the disappointment of those who would like to see Smithian economics more widely understood, free market principles are now increasingly buried in the homilies about how nice Adam Smith really was and how he didn't really support free markets even though it sounded like he did and he didn't really promote self-interest even though he wrote an entire book about the role self-interest in economics.
The Wealth of Nations, we are assured, is really a study on how wealth can be redistributed so that it's equal and fair for everyone. The point about redistribution through the market is completely lost in the fulsome joy of discovering that Adam Smith favoured wealth redistribution, just like any self-respecting Marxist. After all, if he favoured redistribution of wealth then surely he'd be happy that we finally figured out a whole raft of tax laws and other punitive measures designed to redistribute the wealth quite nicely? He surely wouldn't be too bothered about the methods involved, as long as the poor were intended to end up on top. In that way his ideas have been interpreted to give a meaning exactly opposite from what he wrote.
It's easy to see why Ayn Rand was keen to avoid that fate. She dealt decisively with the risk of being accused of selfishness by writing a book called The Virtue of Selfishness. Of course, she had to begin by defining selfishness, and it could be said that what she described as 'selfishness' is nothing more than Smith's notion of self-interest.
We all want to be concerned with our own interests. After all, you can't follow the biblical edict to love your neighbour as you love yourself, if you don't bother loving yourself in the first place.
So the notion of self-interest is not really controversial. It all depends on what you're being self-interested about, and what outcomes your self-interest leads to. Self-interest in working hard to improve your material conditions, yes. Self-interest in stabbing your neighbour so you can steal his stuff and thereby improve your material conditions, no.
If benevolence is close to being an unqualified good in the general perception, then selfishness is close to being an unqualified evil in the sense that most people would not like to be thought of as selfish. So, for the avoidance of doubt, why didn't Ayn Rand just call her book 'The Virtue of Self-Interest'? She would have had less chance of problems that way, specifically less chance of being accused of being an evil witch.
From witnessing the fate that befell Mr Smith - nobody is thinking about his ideas, they are just debating whether he was for or against selfishness - you can see that if Ms Rand had spoken of self-interest she would have had to spend the rest of her life explaining how self-interest is not really the same thing as selfishness, in order to mollify those who are deathly afraid of being found to have traces of selfishness within their virtuous souls.
So by using the word 'selfishness' she achieved a situation where you can either read her work or not, but either way you wouldn't waste your time accusing her of promoting selfishness because she obviously didn't care if people called her selfish. Ooooh, brave lady.
Since she already grabbed that old 'selfishness' bull by the horns, the only thing left to do is read what she said about why being rational is better than being irrational. So you won't find anybody trying to argue that really she was a closet progressive and a rather nice lady when you get to understand her better and not selfish at all. She shifted the debate away from whether she's a nice lady or not, to a debate about the meaning of rationality. Love her or loathe her, but is what she said true? That should be the question.
It seems therefore that arguing about the selfishness of Adam Smith is nothing more than an entertaining modern past-time, in an age when we are more obsessed with classifying people into ideological and political boxes than with the pursuit of truth.
But the only way to know what the Wealth of Nations is trying to say is to...well, read the Wealth of Nations. And remember that truth is what it is, regardless of whether it fits in nicely with what the majority of sheeple profess.
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Adam Smith, being a classical liberal, had a theory of justice that seems sketchy and anaemic to modern eyes. It is often described as 'thin' because it included only three rules of justice that must be guaranteed by law:
“What about inequality and social justice?!” the people cry. In this age of Affluence and Consumerism, surely any theory of justice must ensure that we all have an equal amount of stuff and equal access to all the good things in life, so that it’s fair?
These days it seems that most people align themselves with either the political left or the political right. This rigid and simplistic dichotomy creates a lot of confusion as people try to dig up all the philosophers from ages past with the aim of classifying them as either left or right within the modern political lexicon. Hence the epic battle for Adam Smith’s legacy. If Adam Smith still walked the earth, would he be a left-leaning liberal or a right-leaning liberal?
Capitalism, as defined by Milton Friedman, refers to 'the organization of the bulk of economic activity through private enterprise operating in a free market...a system of economic freedom and a necessary condition for political freedom.' Friedman thus defends capitalism not for its own sake, nor even for its capacity to create wealth, but because of its association with individual, economic, and political freedom.
Legal scholarship has a very complex and awkward relationship with the idea of 'efficiency'. Scholars like to think that they are promoting social justice in all its forms, and unfortunately the idea of efficiency doesn't seem to be extremely honourable, being connected as it is with capitalist markets and correlated associations such as greed, selfishness, and, most embarrassing of all, great wealth. It therefore seems impossible to write about efficiency without sounding like a cruel person who cares nothing about the milk of human kindness.
Private property is often criticised for failing to promote equality: with private property rights, some people inevitably end up with more than others. Is this unjust, on grounds that economic “equality” is an essential component of justice? We know that justice is a good thing (nobody would argue that injustice is an admirable goal to aspire to) but does it follow logically that the full force of the law should be harnessed to equalize everything? Equal amounts of stuff, equal pay for all working people especially if they're women, equal benefits for all unworking people and equal opportunities for all to have an equally good life. Everything should be equally distributed. Because otherwise it’s not fair.
Capitalist free markets do not generally create a situation where everyone has the same amount of stuff. Sadly, progress tends to yield unequal outcomes. Enter the welfare state, a creature of most modern capitalist economies. The idea is that taxes will be collected to create a repository of public funds to provide a safety-net for the poorest and most vulnerable in society. Thus the welfare state would be expected to meet the costs of unemployment insurance and pensions for those who found themselves cast on the heap when the company they worked for goes bust.
When people support notions of economic equality it's not always clear exactly what they have in mind. In Capitalism and Freedom Friedman challenges us to think about the meaning of 'equality' in the context of a market economy. If we are to translate the ideals of equality into reality we'll need a conceptual framework that's a bit more sophisticated than 'everyone having the same amount of stuff' or 'paying everyone the same wage'.
Within the framework of private law, where individuals are largely self-governing subject to the basic principles of the law of obligations (contract, property, and tort) the law has nothing to say about whether everyone should have the same amount of stuff or even the same amount of social standing or economic power.
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