THE FOUNDATIONS OF ECONOMIC LIBERALISM
I
The Industrial Revolution is hardly less a fundamental change in the
habits of English thought than in the technique of commercial
production. Alongside the discoveries of Hargreaves and Crompton, the
ideas of Hume and Adam Smith shifted the whole perspective of men's
minds. The Revolution, indeed, like all great movements, did not
originate at any given moment. There was no sudden invention which made
the hampering system of government-control seem incompatible with
industrial advance. The mercantilism against which the work of Adam
Smith was so magistral a protest was already rather a matter of external
than internal commerce when he wrote. He triumphed less because he
suddenly opened men's eyes to a truth hitherto concealed than because he
represented the culmination of certain principles which, under various
aspects, were common to his time. The movement for religious toleration
is not only paralleled in the next century by the movement for economic
freedom, but is itself in a real sense the parent of the latter. For it
is not without significance that the pre-Adamite economists were almost
without exception the urgent defenders of religious toleration. The
landowners were churchmen, the men of commerce largely Nonconformist;
and religious proscription interfered with the balance of trade. When
the roots of religious freedom had been secured, it was easy for them to
transfer their argument to the secular sphere.
Nothing, indeed, is more important in the history of English political
philosophy than to realize that from Stuart times the Nonconformists
were deeply bitten with distrust of government. Its courts of special
instance hampered industrial life at every turn in the interest of
religious conformity. Their heavy fines and irritating restrictions upon
foreign workmen were nothing so much as a tax upon industrial progress.
What the Nonconformists wanted was to be left alone; and Davenant
explained the root of their desire when he tells of the gaols crowded
with substantial tradesmen whose imprisonment spelt unemployment for
thousands of workmen. Sir William Temple, in his description of Holland,
represents economic prosperity as the child of toleration. The movement
for ecclesiastical freedom in England, moreover, became causally linked
with that protest against the system of monopolies with which it was the
habit of the court to reward its favorites. Freedom in economic matters,
like freedom in religion, came rapidly to mean permission that diversity
shall exist; and economic diversity soon came to mean free competition.
The latter easily became imbued with religious significance. English
puritanism, as Troeltsch has shown us, insisted that work was the will
of God and its performance the test of grace. The greater the energy of
its performance, the greater the likelihood of prosperity; and thence it
is but a step to argue that the free development of a man's industrial
worth is the law of God. Success in business, indeed, became for many a
test of religious grace, and poverty the proof of God's disfavor. Books
like Steele's _Religious Tradesman_ (1684) show clearly how close is the
connection. The hostility of the English landowners to the commercial
classes in the eighteenth century is at bottom the inheritance of
religious antagonism. The typical qualities of dissent became a certain
pushful exertion by which the external criteria of salvation could be
secured.
Much of the contemporary philosophy, moreover, fits in with this
attitude. From the time of Bacon, the main object of speculation was to
disrupt the scholastic teleology. In the result the State becomes
dissolved into a discrete mass of individuals, and the self-interest of
each is the starting-point of all inquiry. Hobbes built his state upon
the selfishness of men; even Locke makes the individual enter political
life for the benefits that accrue therefrom. The cynicism of Mandeville,
the utilitarianism of Hume, are only bypaths of the same tradition. The
organic society of the middle ages gives place to an individual who
builds the State out of his own desires. Liberty becomes their
realization; and the object of the State is to enable men in the
fullest sense to secure the satisfaction of their private wants. How far
is that conception from the Anglican outlook of the seventeenth century,
a sermon of Laud's makes clear. "If any man," he said,[19] "be so
addicted to his private interest that he neglects the common State, he
is void of the sense of piety, and wishes peace and happiness for
himself in vain. For, whoever he be, he must live in the body of the
commonwealth and in the body of the Church." So Platonic an outlook was
utterly alien from the temper of puritanism. They had no thought of
sacrificing themselves to an institution which they had much ground for
thinking existed only for their torment. The development of the
religious instinct to the level of salvation found its philosophic
analogue in the development of the economic sense of fitness. The State
became the servant of the individual from being his master; and service
became equated with an internal policy of _laissez-faire_.
[Footnote 19: Sermon of June 19, 1621. Works (ed. of 1847), p. 28.]
Such summary, indeed, abridges the long process of release from which
the eighteenth century had still to suffer; nor does it sufficiently
insist upon the degree to which the old idea of state control still held
sway in external policies of trade. Mercantilism was still in the
ascendant when Adam Smith came to write. Few statesmen of importance
before the younger Pitt had learned the secret of its fallacies; and,
indeed, the chief ground for difference between Chatham and Burke was
the former's suspicion that Burke had embraced the noxious doctrine of
free trade. Mercantilism, by the time of Locke, is not the simple error
that wealth consists in bullion but the insistence that the balance of
trade must be preserved. Partly it was doubtless derived from the
methods of the old political arithmetic of men like Petty and Davenant;
the individual seeks a balance at the end of his year's accounting and
so, too, the State must have a balance. "A Kingdom," said Locke, "grows
rich or poor just as a farmer does, and no other way"; and while there
is a sense in which this is wholly true, the meaning attached to it by
the mercantilists was that foreign competition meant national weakness.
They could not conceive a commercial bargain which was profitable to
both sides. Nations grow prosperous at each other's expense; wherefore a
woolen trade in Ireland necessarily spells English unemployment. Even
Davenant, who was in many respects on the high road to free trade, was
in this problem adamant. Protection was essential in the colonial
market; for unless the trade of the colonies was directed through
England they might be dangerous rivals. So Ireland and America were
sacrificed to the fear of British merchants, with the inevitable result
that repression brought from both the obvious search for remedy.
Herein it might appear that Adam Smith had novelty to contribute; yet
nothing is more certain than that his full sense of the world as the
only true unit of marketing was fully grasped before him. In 1691 Sir
Dudley North published his _Discourses upon Trade_. Therein he clearly
sees that commercial barriers between Great Britain and France are
basically as senseless as would be commercial barriers between Yorkshire
and Middlesex. Indeed, in one sense, North goes even further than Adam
Smith, for he argues against the usury laws in terms Bentham would
hardly have disowned. Ten years later an anonymous writer in a tract
entitled _Considerations on the East India Trade_ (1701) has no
illusions about the evil of monopoly. He sees with striking clarity that
the real problem is not at any cost to maintain the industries a nation
actually possesses, but to have the national capital applied in the most
efficient channels. So, too, Hume dismissed the Mercantile theory with
the contemptuous remark that it was trying to keep water beyond its
proper level. Tucker, as has been pointed out, was a free trader, and
his opinion of the American war was that it was as mad as those who
fought "under the peaceful Cross to recover the Holy Land"; and he
urged, indeed, prophesied, the union with Ireland in the interest of
commercial amity. Nor must the emphasis of the Physiocrats upon free
trade be forgotten. There is no evidence now that Adam Smith owed this
perception to his acquaintance with Quesnay and Turgot; but they may
well have confirmed him in it, and they show that the older philosophy
was attacked on every side.
Nor must we miss the general atmosphere of the time. On the whole his
age was a conservative one, convinced, without due reason, that
happiness was independent of birth or wealth and that natural law
somehow could be made to justify existing institutions. The poets, like
Pope, were singing of the small part of life which kings and laws may
hope to cure; and that attitude is written in the general absence of
economic legislation during the period. Religiously, the Church exalted
the _status quo_; and where, as with Wesley, there was revolt, its
impetus directed the mind to the source of salvation in the individual
act. It may, indeed, be generally argued that the religious teachers
acted as a social soporific. Where riches accumulated, they could be
regarded as the blessing of God; where they were absent their
unimportance for eternal happiness could be emphasized. Burke's early
attack on a system which condemned "two hundred thousand innocent
persons ... to so intolerable slavery" was, in truth, a justification of
the existing order. The social question which, in the previous century,
men like Bellers and Winstanley had brought into view, dropped out of
notice until the last quarter of the century. There was, that is to say,
no organized resistance possible to the power of individualism; and
resistance was unlikely to make itself heard once the resources of the
Industrial Revolution were brought into play. Men discovered with
something akin to ecstasy the possibilities of the new inventions; and
when the protest came against the misery they effected, it was answered
that they represented the working of that natural law by which the
energies of men may raise them to success. And discontent could easily,
as with the saintly Wilberforce, be countered by the assertion that it
was revolt against the will of God.
II
Few lives represent more splendidly than that of Adam Smith the
speculative ideal of a dispassionate study of philosophy. He was
fortunate in his teachers and his friends. At Glasgow he was the pupil
of Francis Hutcheson; and even if he was taught nothing at Oxford, at
least six years of leisure gave him ample opportunity to learn. His
professorship at Glasgow not only brought him into contact with men like
Hume, but also admitted him to intercourse with a group of business men
whose liberal sentiments on commerce undoubtedly strengthened, if they
did not originate, his own liberal views. At Glasgow, too, in 1759, he
published his _Theory of Moral Sentiments_, written with sufficient
power of style to obscure its inner poverty of thought. The book brought
him immediately a distinguished reputation from a public which exalted
elegance of diction beyond all literary virtues. The volatile Charles
Townshend made him tutor to the Duke of Buccleuch, through whom Smith
not only secured comparative affluence for the rest of his days, but
also a French tour in which he met at its best the most brilliant
society in Europe. The germ of his _Wealth of Nations_ already lay
hidden in those Glasgow lectures which Mr. Cannan has so happily
recovered for us; and it was in a moment of leisure in France that he
set to work to put them together in systematic fashion. Not, indeed,
that the Frenchmen whom he met, Turgot, Quesnay and Dupont de Nemours,
can be said to have done more than confirm the truths he had already
been teaching. When he returned to Scotland and a competence ten years
of constant labor were necessary before the _Wealth of Nations_ was
complete. After its publication, in 1776, Adam Smith did little save
attend to the administrative duties of a minor, but lucrative office in
the Customs. Until the end, indeed, he never quite gave up the hope,
foreshadowed first in the _Moral Sentiments_ of completing a gigantic
survey of civilized institutions. But he was a slow worker, and his
health was never robust. It was enough that he should have written his
book and cherished friendships such as it is given to few men to
possess. Hume and Burke, Millar the jurist, James Watt, Foulis the
printer, Black the chemist and Hutton of geological fame--it is an
enviable circle. He had known Turgot on intimate terms and visited
Voltaire on Lake Geneva. Hume had told him that his book had "depth and
solidity and acuteness"; the younger Pitt had consulted him on public
affairs. Few men have moved amid such happy peace within the very centre
of what was most illustrious in their age.
We are less concerned here with the specific economic details of the
_Wealth of Nations_ than with its general attitude to the State. But
here a limitation upon criticism must be noted. The man of whom Smith
writes is man in search of wealth; by definition the economic motive
dominates his actions. Such abuse, therefore, as Ruskin poured upon him
is really beside the point when his objective is borne in mind. What
virtually he does is to assume the existence of a natural economic order
which tends, when unrestrained by counter-tendencies, to secure the
happiness of men. "That order of things which necessity imposes in
general," he writes, "... is, in every particular country promoted by
the natural inclinations of man"; and he goes on to explain what would
have resulted "if human institutions had never thwarted those natural
inclinations." "All systems either of preference or of restraint,
therefore, being thus completely taken away," he writes again, "the
obvious and simple system of natural liberty establishes itself of its
own accord. Every man, as long as he does not violate the laws of
justice, is left perfectly free to pursue his own interest in his own
way.... The sovereign is completely discharged from a duty in the
attempting to perform which he must always be exposed to innumerable
delusions, and for the proper performance of which no human wisdom or
knowledge would ever be sufficient; the duty of superintending the
industry of private people and of directing it towards the employments
most suitable to the interests of the society."
The State, in this conception has but three functions--defence, justice
and "the duty of erecting and maintaining certain public works and
certain public institutions which it can never be for the interest of
any individual, or small number of individuals, to erect and maintain."
The State, in fact, is simply to provide the atmosphere in which
production is possible. Nor does Smith conceal his thought that the main
function of justice is the protection of property. "The affluence of
the rich," he wrote, "excites the indignation of the poor, who are often
both driven by want and prompted by envy to invade their possessions. It
is only under the shelter of the civil magistrate that the owner of that
valuable property, acquired by the labor of many years, or perhaps many
successive generations, can sleep a single night in security." The
attitude, indeed, is intensified by his constant sense that the capital
which makes possible new productivity is the outcome of men's sacrifice;
to protect it is thus to safeguard the sources of wealth itself. And
even if the State is entrusted with education and the prevention of
disease, this is rather for the general benefit they confer and the
doubt that private enterprise would find them profitable than as the
expression of a general rule. Collective effort of every kind awakened
in him a deep distrust. Trade regulations such as the limitation of
apprenticeship he condemned as "manifest encroachment upon the just
liberty of the workman and of those who may be disposed to employ him."
Even educational establishments are suspect on the ground--not
unnatural after his own experience of Oxford--that their possibilities
of comfort may enervate the natural energies of men.
The key to this attitude is clear enough. The improvement of society is
due, he thinks not to the calculations of government but to the natural
instincts of economic man. We cannot avoid the impulse to better our
condition; and the less its effort is restrained the more certain it is
that happiness will result. We gain, in fact, some sense of its inherent
power when we bear in mind the magnitude of its accomplishment despite
the folly and extravagance of princes. Therein we have some index of
what it would achieve if left unhindered to work out its own destinies.
Human institutions continually thwart its power; for those who build
those institutions are moved rather "by the momentary fluctuations of
affairs" than their true nature. "That insidious and crafty animal,
vulgarly called a politician or statesman" meets little mercy for his
effort compared to the magic power of the natural order. "In all
countries where there is a tolerable security," he writes, "every man
of common understanding will endeavor to employ whatever stock he can
command in procuring either present enjoyment or future profit."
Individual spontaneity is thus the root of economic good; and the real
justification of the state is the protection it affords to this impulse.
Man, in fact, is by nature a trader and he is bound by nature to
discover the means most apt to progress.
Nor was he greatly troubled by differences of fortune. Like most of the
Scottish school, especially Hutcheson and Hume, he thought that men are
much alike in happiness, whatever their station or endowments. For there
is a "never-failing certainty" that "all men sooner or later accommodate
themselves to whatever becomes their permanent situation"; though he
admits that there is a certain level below which poverty and misery go
hand in hand. But, for the most part, happiness is simply a state of
mind; and he seems to have had but little suspicion that differences of
wealth might issue in dangerous social consequence. Men, moreover, he
regarded as largely equal in their original powers; and differences of
character he ascribes to the various occupations implied in the
division of labor. Each man, therefore, as he follows his self-interest
promotes the general happiness of society. That principle is inherent in
the social order. "Every man," he wrote in the _Moral Sentiments_, "is
by nature first and principally recommended to his own care" and therein
he is "led by an invisible hand to promote an end which was no part of
his intention." The State, that is to say, is the sum of individual
goods; whereby to better ourselves is clearly to its benefit. And that
desire "which comes with us from the womb and never leaves us till we go
to the grave" is the more efficacious the less it is restrained by
governmental artifice. For we know so well what makes us happy that none
can hope to help us so much as we help ourselves.
Enlightened selfishness is thus the root of prosperity; but we must not
fall into the easy fallacy which makes Smith deaf to the plaint of the
poor. He urged the employer to have regard to the health and welfare of
the worker, a regard which was the voice of reason and humanity. Where
there was conflict between love of the _status quo_ and a social good
which Revolution alone could achieve, he did not, at least in the _Moral
Sentiments_, hesitate to choose the latter. Order was, for the most
part, indispensable; but "the greatest and noblest of all characters" he
made the reformer of the State. Yet he is too impressed by the working
of natural economic laws to belittle their influence. Employers, in his
picture, are little capable of benevolence or charity. Their rule is the
law of supply and demand and not the Sermon on the Mount. They combine
without hesitation to depress wages to the lowest point of subsistence.
They seize every occasion of commercial misfortune to make better terms
for themselves; and the greater the poverty the more submissive do
servants become so that scarcity is naturally regarded as more favorable
to industry.
Obviously enough, the inner hinge of all this argument is Smith's
conception of nature. Nor can there be much doubt of what he thought its
inner substance. Facile distinctions such as the effort of Buckle to
show that while in the _Moral Sentiments_ Adam Smith was dealing with
the unselfish side of man's nature, in the _Wealth of Nations_ he was
dealing with a group of facts which required the abstraction of such
altruistic elements, are really beside the point. Nature for Smith is
simply the spontaneous action of human character unchecked by hindrances
of State. It is, as Bonar has aptly said, "a vindication of the
unconscious law present in the separate actions of men when these
actions are directed by a certain strong personal motive." Adam Smith's
argument is an assumption that the facts can be made to show the
relative powerlessness of institutions in the face of economic laws
grounded in human psychology. The psychology itself is relatively
simple, and, at least in the _Wealth of Nations_ not greatly different
from the avowed assumptions of utilitarianism. He emphasizes the
strength of reason in the economic field, and his sense that it enables
men to judge much better of their best interests than an external
authority can hope to do. And therefore the practices accomplished by
this reason are those in which the impulses of men are to be found. The
order they represent is the natural order; and whatever hinders its full
operation is an unwise check upon the things for which men strive.
Obviously enough, this attitude runs the grave risk of seeming to
abstract a single motive--the desire for wealth--from the confused
welter of human impulses and to make it dominant at the expense of human
nature itself. A hasty reading of Adam Smith would, indeed, confirm that
impression; and that is perhaps why he seemed to Ruskin to blaspheme
human nature. But a more careful survey, particularly when the _Moral
Sentiments_ is borne in mind suggests a different conclusion. His
attitude is implicit in the general medium in which he worked. What he
was trying to do was less to emphasize that men care above all things
for the pursuit of wealth than that no institutional modifications are
able to destroy the power of that motive to labor. There is too much
history in the _Wealth of Nations_ to make tenable the hypothesis of
complete abstraction. And there is even clear a sense of a nature behind
his custom when he speaks of a "sacred regard" for life, and urges that
every man has property in his own labor. The truth here surely is that
Smith was living in a time of commercial expansion. What was evident to
him was the potential wealth to be made available if the obsolete system
of restraint could be destroyed. Liberty to him meant absence of
restraint not because its more positive aspect was concealed from him
but rather because the kind of freedom wanted in the environment in
which he moved was exactly that for which he made his plea. There is a
hint that freedom as a positive thing was known to him from the fact
that he relied upon education to relieve the evils of the division of
labor. But the general context of his book required less emphasis upon
the virtues of state-interference than upon its defects. His cue was to
show that all the benefits of regulation had been achieved despite its
interference; from which, of course, it followed that restraint was a
matter of supererogation.
III
It would be tedious to praise the _Wealth of Nations_. It may be
doubtful whether Buckle's ecstatic judgment that it has had more
influence than any other book in the world was justified even when he
wrote; but certainly it is one of the seminal books of the modern time.
What is more important is to note the perspective in which its main
teaching was set. He wrote in the midst of the first significant
beginnings of the Industrial Revolution; and his emphatic approval of
Watt's experiments suggests that he was not unalive to its importance.
Yet it cannot in any full sense be said that the Industrial Revolution
has a large part in his book. The picture of industrial organization and
its possibilities is too simple to suggest that he had caught any far
reaching glimpse into the future. Industry, for him, is still in the
last stage of handicraft; it is a matter of skillful workmanship and not
of mechanical appliance. Capital is still the laborious result of
parsimony. Credit is spoken of rather in the tones of one who sees it
less as a new instrument of finance than a dangerous attempt by the
aspiring needy to scale the heights of wealth. Profits are always a
justified return for productive labor; interest the payment for the use
of the owner's past parsimony. Business is still the middleman
distributing to the consumer on a small scale. He did not, or could not,
conceive of an industry either so vast or so depersonalized as at
present. He was rather writing of a system which, like the politics of
the eighteenth century, had reached an equilibrium of passable comfort.
His natural order was, at bottom, the beatification of that to which
this equilibrium tended. Its benefits might be improved by free trade
and free workmanship; but, upon the whole, he saw no reason to call in
question its fundamental dogmas.
Therein, of course, may be found the main secret of his omissions. The
problem of labor finds no place in his book. The things that the poor
have absent from their lives, that concept of a national minimum below
which no State can hope to fulfil even the meanest of its aims, of these
he has no conception. Rather the note of the book is a quiet optimism,
impressed by the possibilities of constant improvement which lie
imbedded in the human impulse to better itself. What he did not see is
the way in which the logical outcome of the system he describes may
well be the attainment of great wealth at a price in human cost that is
beyond its worth. Therein, it is clear, all individualistic theories of
the state miss the true essence of the social bond. Those who came after
Adam Smith saw only half his problem. He wrote a consumer's theory of
value. But whereas he had in mind a happy and contented people, the
economics of Ricardo and Malthus seized upon a single element in human
nature as that which alone the State must serve. Freedom from restraint
came ultimately to mean a judgment upon national well-being in terms of
the volume of trade. "It is not with happiness," said Nassau Senior,
"but with wealth that I am concerned as a political economist; and I am
not only justified in omitting, but am perhaps bound to omit, all
considerations which have no influence upon wealth."
In such an aspect, it was natural for the balance of investigation to
swing towards the study of the technique of production; and with the
growing importance of capital, as machinery was introduced, the worker,
without difficulty, became an adjunct, easily replaced, to the machine.
What was remembered then was the side of Adam Smith which looked upon
enlightened selfishness as the key to social good. Regulation became
anathema even when the evils it attempted to restrain were those which
made the mass of the people incapable of citizenship. Even national
education was regarded as likely to destroy initiative; or, as a
pauper's dole which men of self-respect would regard with due
abhorrence. The State, in short, ceased to concern itself with justice
save insofar as the administration of a judicial code spelled the
protection of the new industrial system. Nothing is more striking in the
half-century after Adam Smith than the optimism of the economist and the
business man in contrast to the hopeless despair of labor. That men can
organize to improve their lot was denied with emphasis, so that until
Francis Place even the workers themselves were half-convinced. The
manufacturers were the State; and the whole intellectual strength of
economics was massed to prove the rightness of the equation. The
literature of protest, men like Hall and Thompson, Hodgskin and Bray,
exerted no influence upon the legislation of the time; and Robert Owen
was deemed an amiable eccentric rather than the prophet of a new hope.
The men who succeeded, as Wilberforce, carried out to the letter the
unstated assumptions of Puritan economics. The poor were consigned to a
God whose dictates were by definition beneficent; and if they failed to
understand the curious incidence of his rewards that was because his
ways were inscrutable. No one who reads the tracts of writers like
Harriet Martineau can fail to see how pitiless was the operation of this
attitude. Life is made a struggle beneficent, indeed, but deriving its
ultimate meaning from the misery incident to it. The tragedy is excused
because the export-trade increases in its volume. The iron law of wages,
the assumed transition of every energetic worker to the ranks of wealth,
the danger lest the natural ability of the worker to better his
condition be sapped by giving to him that which his self-respect can
better win--these became the unconscious assumptions of all economic
discussion.
In all this, as in the foundation with which Adam Smith provided it, we
must not miss the element of truth that it contains. No poison is more
subtly destructive of the democratic State than paternalism; and the
release of the creative impulses of men must always be the coping-stone
of public policy. Adam Smith is the supreme representative of a
tradition which saw that release effected by individual effort. Where
each man cautiously pursued the good as he saw it, the realization was
bound, in his view, to be splendid. A population each element of which
was active and alert to its economic problems could not escape the
achievement of greatness. All that is true; but it evades the obvious
conditions we have inherited. For even when the psychological
inadequacies of Smith's attitude are put aside, we can judge his theory
in the light of the experience it summarizes. Once it is admitted that
the object of the State is the achievement of the good life, the final
canon of politics is bound to be a moral one. We have to inquire into
the dominant conception of the good life, the number of those upon whom
it is intended that good shall be conferred.
In the light of this conception it is obvious enough that Smith's view
is impossible. No mere conflict of private interests, however pure in
motive, seems able to achieve a harmony of interest between the members
of the State. Liberty, in the sense of a positive and equal opportunity
for self-realization, is impossible save upon the basis of the
acceptance of certain minimal standards which can get accepted only
through collective effort. Smith did not see that in the processes of
politics what gets accepted is not the will that is at every moment a
part of the state-purpose, but the will of those who in fact operate the
machinery of government. In the half-century after he wrote the men who
dominated political life were, with the best intentions, moved by
motives at most points unrelated to the national well-being. The
fellow-servant doctrine would never have obtained acceptance in a state
where, as he thought, employer and workman stood upon an equal footing.
Opposition to the Factory Acts would never have developed in a community
where it was realized that below certain standards of subsistence the
very concept of humanity is impossible. Modern achievement implies a
training in the tools of life; and that, for most, is denied even in our
own day to the vast majority of men. In the absence of legislation, it
is certain that those who employ the services of men will be their
political masters; and it will follow that their Acts of Parliament will
be adapted to the needs of property. That shrinkage of the purpose of
the State will mean for most not merely hardship but degradation of all
that makes life worthy. Upon those stunted existences, indeed, a wealthy
civilization may easily be builded. Yet it will be a civilization of
slaves rather than of men.
The individualism, that is to say, for which Adam Smith was zealous
demands a different institutional expression from that which he gave it.
We must not assume an _a priori_ justification for the forces of the
past. The customs of men may represent the thwarting of the impulses of
the many at the expense of the few not less easily than they may embody
a general desire; and it is surely a mistaken usage to dignify as
natural whatever may happen to have occurred. A man may find
self-realization not less in working for the common good than in the
limited satisfaction of his narrow desire for material advancement. And
that, indeed, is the starting-point of modern effort. Our liberty means
the consistent expression of our personality in media where we find
people like-minded with ourselves in their conception of social life.
The very scale of civilization implies collective plans and common
effort. The constant revision of our basic notions was inevitable
immediately science was applied to industry. There was thus no reason to
believe that the system of individual interests for which Smith stood
sponsor was more likely to fit requirements of a new time than one which
implied the national regulation of business enterprise. The danger in
every period of history is lest we take our own age as the term in
institutional evolution. Private enterprise has the sanction of
prescription; but since the Industrial Revolution the chief lesson we
have had to learn is the unsatisfactory character of that title. History
is an unenviable record of bad metaphysics used to defend obsolete
systems. It took almost a century after the publication of the _Wealth
of Nations_ for men to realize that its axioms represented the
experience of a definite time. Smith thought of freedom in the terms
most suitable to his generation and stated them with a largeness of view
which remains impressive even at a century's distance.
But nothing is more certain in the history of political philosophy than
that the problem of freedom changes with each age. The nineteenth
century sought release from political privilege; and it built its
success upon the system prepared by its predecessor. It can never be too
greatly emphasized that in each age the substance of liberty will be
found in what the dominating forces of that age most greatly want. With
Locke, with Smith, with Hegel and with Marx, the ultimate hypothesis is
always the summary of some special experience universalized. That does
not mean that the past is worthless. Politics, as Seeley said, are
vulgar unless they are liberalized by history; and a state which failed
to see itself as a mosaic of ancestral institutions would build its
novelties upon foundations of sand. Suspicions of collective effort in
the eighteenth century ought not to mean suspicion in the twentieth; to
think in such fashion is to fall into the error for which Lassalle so
finely criticized Hegel. It is as though one were to confound the
accidental phases of the history of property with the philosophic basis
of property itself. From such an error it is the task of history above
all to free us. For it records the ideals and doubts of earlier ages as
a perennial challenge to the coming time.
The rightness of this attitude admits of proof in terms of the double
tradition to which Adam Smith gave birth. On the one hand he is the
founder of the classic political economy. With Ricardo, the elder Mill
and Nassau Senior, the main preoccupation is the production of wealth
without regard to its moral environment; and the state for them is
merely an engine to protect the atmosphere in which business men achieve
their labors. There is nothing in them of that fine despair which made
Stuart Mill welcome socialism itself rather than allow the continuance
of the new capitalist system. Herein the State is purged of moral
purpose; and the utilitarian method achieves the greatest happiness by
insisting that the technique of production must dominate all other
circumstances. Until the Reform Act of 1867, the orthodox economists
remained unchallenged. The use of the franchise was only beginning to be
understood. The "new model" of trade unionism had not yet been tested in
the political field. But it was discovered impossible to act any longer
upon the assumptions of the abstract economic man. The infallible sense
of his own interest was discovered to be without basis in the facts for
the simple reason that the instruments of his perception obviously
required training if they were to be applied to a complex world.
Individualism, in the old, utilitarian sense, passed away because it
failed to build a State wherein a channel of expression might be found
for the creative energies of humble men.
It is only within the last two decades that we have begun to understand
the inner significance of the protest against this economic liberalism.
Adam Smith had declared the source of value to lie in labor; and, at
the moment of its deepest agony, there were men willing to point the
moral of his tale. That it represented an incautious analysis was, for
them, unimportant beside the fact that it opened once more a path
whereby economics could be reclaimed for moral science. For if labor was
the source of value, as Bray and Thompson pointed out, it seemed as
though degradation was the sole payment for its services. They did not
ask whether the organization they envisaged was economically profitable,
but whether it was ethically right. No one can read the history of these
years and fail to understand their uncompromising denial of its
rightness. Their negation fell upon unheeding ears; but twenty years
later, the tradition for which they stood came into Marx's hands and was
fashioned by him into an interpretation of history. With all its faults
of statement and of emphasis, the doctrine of the English socialists has
been, in later hands, the most fruitful hypothesis of modern politics.
It was a deliberate effort, upon the basis of Adam Smith's ideas, to
create a commonwealth in the interests of the masses. Wealth, in its
view, was less the mere production of goods than the accumulated
happiness of humble men. The impulses it praised and sought through
state-action to express were, indeed, different from those upon which
Smith laid emphasis; and he would doubtless have stood aghast at the way
in which his thought was turned to ends of which he did not dream. Yet
he can hardly have desired a greater glory. He thus made possible not
only knowledge of a State untrammelled in its economic life by moral
considerations; but also the road to those categories wherein the old
conception of co-operative effort might find a new expression. Those who
trod in his footsteps may have repudiated the ideal for which he stood,
but they made possible a larger hope in which he would have been proud
and glad to share.
BIBLIOGRAPHY
This bibliography makes no pretence to completeness. It attempts only to
enumerate the more obvious sources that an interested reader would care
to examine.
GENERAL
LESLIE STEPHEN. _History of English Thought in the Eighteenth Century_.
1876. Vol. II, Chapters IX and X.
W.E.H. LECKY. _History of England in the Eighteenth Century._
A.L. SMITH. _Political Philosophy in England in the Seventeenth and
Eighteenth Centuries_ in the _Cambridge Modern History_. Vol. VI,