Adam Smith on the terrible burden of the cultured intellectual

Gotta love Adam Smith, writing as he does from a ruling class perspective.

So he writes of the working class man:

The torpor of his mind renders him, not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. (Wealth of Nations V.i.f.50)

By contrast, the cultured refinement of the ruling class intellectual (like Smith himself) is a terrible burden:

The contemplation of so great a variety of objects necessarily exercises their minds in endless comparisons and combinations,and renders their understandings, in an extraordinary degree, both acute and comprehensive. Unless those few, however, happen to be placed in some very particular situations, their great abilities, though honourable to themselves, may contribute very little to the good government or happiness of their society. Notwithstanding the great abilities of those few, all the nobler parts of the human character may be, in a great measure, obliterated and extinguished in the great body of the people. (V.i.f.51)


Adam Smith’s suspicion of paper money and of useless professions

This one is certainly not celebrated or even mentioned when the disciples of Adam Smith wax forth: he was deeply suspicious of paper money, speaking of being ‘suspended upon the Daedalian wings of paper money’ (Wealth of Nations, II.2.86).

And he has little time for creative and unproductive activities, such as churchmen and buffoons:

In the same class must be ranked, some both of the gravest and most important, and some of the most frivolous professions: churchmen, lawyers, physicians, men of letters of all kinds; players, buffoons, musicians, opera-singers, opera dancers, &c. s The labour of the meanest of these has a certain value, regulated by the very same principles which regulate that of every other sort of labour; and that of the noblest and most useful, produces nothing which could afterwards purchase or procure an equal quantity of labour. Like the declamation of the actor, the harangue of the orator, or the tune of the musician, the work of all of them perishes in the very instant of its production (II.3.2).

Adam Smith’s soft spot: potatoes and the beautiful Irish

In his little parable of the potato, Adam Smith opines that oats are worst (look at the Scottish), wheat a little better (peruse the English), but potatoes … he veritably drools over the Irish:

The chairmen, porters, and coalheavers in London, and those unfortunate women who live by prostitution, the strongest men and the most beautiful women perhaps in the British dominions, are said to be, the greater part of them, from the lowest rank of people in Ireland, who are generally fed with this root. No food can afford a more decisive proof of its nourishing quality, or of its being peculiarly suitable to the health of the human constitution (Wealth of Nations, I.11.41).

A parable of Adam Smith: when I grow up I want to be an executioner

One of many parables by that great story-teller, Adam Smith. It’s point is that difficulty, filth, and dishonour result in higher pay. So we read of the journeyman tailor, smith, and collier, only to come across the closing lines of the parable:

Honour makes a great part of the reward of all honourable professions. In point of pecuniary gain, all things considered, they are generally under-recompensed, as I shall endeavour to show by and by. Disgrace has the contrary effect. The trade of a butcher is a brutal and an odious business; but it is in most places more profitable than the greater part of common trades. The most detestable of all employments, that of public executioner, is in proportion to the quantity of work done, better paid than any common trade whatever.

Picture for a moment kids talking about what they want to be when they grow up: doctor, airline pilot, teacher, vet … no, I want to be an executioner.

Idols of Nations: a preliminary outline

I have just signed a contract with Fortress Press for a book called Idols of Nations: The Bible and the Development of Classical Theories of Capitalism. It is the follow-up to The Sacred Economy and is due with the press by 1 September, 2013.

The title comes from Jer 14:22 (and Ps 135:15). Since Adam Smith drew the title of Wealth of Nations from Isa 61:6, 12 (and 60:5) and since my book is critical of the way classical economists used the Bible, Idols of Nations it is.


The book critiques the rise of early theories of capitalism in light of their engagement with biblical texts. It traces the way significant theorists dealt with the Bible in order to develop their positions. Why and how did these theorists use the Bible, is that use legitimate, and what are the implications for the influential theories they developed? How did those engagements change over time as those theories developed a life of their own? This study focuses on material often relegated to the margins of analysis. Thus, while Hobbes and Locke found it necessary to build their theories from biblical analysis, Grotius was an accomplished (and ecumenical) theologian and Malthus an evangelical minister, both seeking to reconcile their positions with their theological approaches. The study also traces the way biblical themes are subsumed at a less explicit but deeper level with the later moral emphasis of Smith, Mill and Ricardo.

In more detail: of late a recovery of the looser connection between Christian theology and neoclassical economics has been pursued by some economists and theologians. However, these studies really do not address crucial issues in relation to theology and the Bible. In this light, we find a disjunction: if the Bible is mentioned, it relates to the political or theological thought of the critic in question; where economics is discussed, the Bible does not appear. For example, while secondary literature mentions the Bible in relation to Locke’s political thought, the crucial role of Genesis in the opening section of Locke’s treatment of private property in Two Treatises on Government is ignored or even excised from printed editions. With Grotius, theology in general may be mentioned in his discussion of property, natural law, freedom of the seas and agonism in ethics and commerce, but the Bible is nowhere to be seen. In regard to Hobbes, the central role of religion in Leviathan is noted in relation to politics and ethics but the Bible’s role in his economic thought on property, money and interest is neglected. As for Rev. Malthus, his theory concerning the relation between population and long-term economic stability is recognised as having a general theological basis in theodicy: overpopulation and its problems be divine moral lessons, but ultimate responsibility lies with human sin. Yet the fact that Malthus grounds his moral arguments on the Bible (eg. Gen 1:28) is rarely, if ever, explored in detail.


1. Introduction: Concerning the Bible and Economic Theory

The book begins by emphasising the importance of the Bible for early theorists of capitalism and the simultaneous neglect of precisely that feature of their work. Rather than peripheral scaffolding that may conveniently be ignored once the theories have been erected, the Bible and their modes of engaging with it are crucial for understanding the development of those theories. The work focuses on four key economists who used the Bible extensively: Hugo Grotius (1583-1645) Thomas Hobbes (1588-1679), John Locke (1632–1704) and Thomas Malthus (1766-1834).

2. Grotius and the Biblical Seas

Concerning Grotius, an analogy may be identified between his Arminian theology and his doctrine of the ‘free seas’ (developed against claims to dominance by other European states) . Following Jacob Arminius (professor of theology at the  University of Leiden until his death in 1610) and his followers, Grotius believed that salvation involves not merely God’s inscrutable decision concerning election (predestination), but also the faith of each individual. This faith is eternally known, but the shift from orthodox Calvinism is crucial: God elects all who have faith. In other words, a window is left open for individual human agency, even if it is foreknown by God. The analogy with his doctrine of the free seas may be cast as follows: instead of states monopolising the sea, each state and individual is free to use the seas for trade, unhindered by any other state. That is, anyone who could be shown to be a user of the sea was thereby entitled to do so; so also, anyone who shows the true marks of faith is thereby one of the elect.

3. Hobbes and the Natural State of ‘Man’

Hobbes the materialist was the son of a vicar, taught by the puritan, John Wilkinson of Magdalen Hall, Oxford, and held rather unconventional theological views. Sporadic attention has been given to Hobbes’s economic thought, especially in terms of its contradictions, working on the tension between self-interest (greed) and public welfare, between homo economicus and absolutism, between the state and the need for individuals to engage in buying, selling and the pursuit of profit, but also of his anticipatory naturalising of capitalism’s functions as intrinsic to human nature in a way that universalised a particular form of economic activity (Levy 1954; Macpherson 1962; Viner 1991). Yet, what is not noticed is that Hobbes develops these arguments through extensive engagement with the Bible. Most significantly, his treatment is highly critical (he is often seen as a precursor to historical critical methods of interpretation), with scepticism concerning miracles, prophecy and traditional views of authorship. Here then I pursue a close analysis of precisely those sections of Leviathan where Hobbes develops his politico-economic arguments through his critical analysis of the Bible.

4 Locke: The Problem of Paradise and Property

Locke is particularly interesting, for he struggled to overcome the profound difference between the Bible and his own economic context. For Locke, the Bible ‘has God for its author; salvation for its end, and truth without any mixture for its matter’. Given that it contains infallible truth, he vowed, ‘I shall immediately condemn and quit any opinion of mine, as soon as I am shown that it is contrary to any revelation in the holy scripture’. The problem was that on his reading, the state of paradise, when human beings were in harmony with God, contained no private property. Human beings had free run of the Garden, with no sense of owning any part of it, since it was God’s creation. How then did private property arise? Through tilling the soil and using the earth for human sustenance. From this first step, the ever more complex patterns of private property developed. Locke thereby elaborates on Hobbes’s preliminary effort to develop the myth that capitalism is the eternal unfolding of basic human proclivities. Three points are worth noting. First, the Bible is naturalised as part of a grand myth of capitalism. Second, he embodies the very difference between the Bible and his own context by the effort to overcome the contradiction of property. Third, the development of private property becomes a result of the Fall, for the human beings only begin to till the soil after they have been expelled from paradise.

5. Malthus: Theodicy and Political Economy

The Reverend Malthus brought the problem of theodicy into the heart of political economy. How could an all-powerful, all-knowing and loving God afflict human beings with overpopulation and thereby famine, disease and starvation? On the one hand, the results of overpopulation may be seen as a moral lesson in order to make us reform our social modes of life. But God is not responsible, argued Malthus, for human beings are guilty (Gen 2-3). In order to counter the objection that Gen 1:28 encourages us to be fruitful and multiply, he argued that we have been reckless and misinterpreted that text, for we have not been fruitful in a responsible manner. Malthus’s answer was characteristic of early 19th century theology: repentance from sin requires a strictly moral life, with sexual abstinence and honest lives (only his followers proposed contraception). Malthus also signals on a theological register a central feature of economic thought, namely, its deeply moral nature.

6. Sublating the Bible: Morality and Classical Economic Theory

Thus, in the chapter on ‘sublating the Bible’, I focus on the work of Adam Smith, David Ricardo, and J.S. Mill. Apart from Malthus, economic theory separated from theology in the 19th century (Waterman 1991; 2004), thereby producing the theoretical perception of an economic sphere independent of all else. In the process, explicit biblical engagements are increasingly sublimated by moral concerns. Thus, the Bible is peripheral in Smith’s work – Wealth of Nations is drawn from Isa 60:5 (and 61:6; 66:12) and the ‘invisible hand’ is a short step from the inexplicable and ubiquitous ‘hand of God’ throughout the Bible – but his argument is deeply moral, with an emphasis on both compassion and self-interest as universal elements of human nature that determine economic behaviour. In Ricardo, this moral focus is manifested in the theory of comparative advantage, while J.S. Mill sought to counter the element of greed in these theories by emphasising that at the end of capitalism, when profits, capital, industry and population had become static, people would turn from selfish to altruistic concerns – the ultimate maximisation of pleasure and happiness. A mark of the sublimation of biblical and even theological concerns is that Smith was a deist, Ricardo a Unitarian and Mill an agnostic who saw the moral and aesthetic power of religion in providing ideals and hopes for human improvement.

7. Conclusion: Economising the Bible

The conclusion explores the paradox in which it seems ‘natural’ to apply neoclassical theories of capitalist economics to the Bible, despite the evident difference between its economic context and capitalism. Two paths may be identified. For some (Locke and Malthus), the Bible presented them with a profound difference between its context and their own. Their work functions as both a recognition of that difference and a sustained effort to overcome that difference in order to naturalise the Bible. For the later theorists (Smith, Mill and Ricardo) and their moral focus, they assumed that human nature is always the same, being a mixture of self-interest and altruism. By connecting that human nature and the core drives of capitalism as a natural fit, they easily moved to the assumption that the history of economies is an unfolding of the same principle. Both paths converge with the myth of a long history of capitalism in which earlier economies function as ‘capitalism light’ – those ‘primitives’ did not know the complexities of fully-fledged capitalism. In regard to the Bible, it thereby seems perfectly ‘natural’ to apply neoclassical economic theory to studying its context. Yet, since it can be shown that early theorists misappropriated the Bible, and since biblical economies were very different than they imagined, such economic theory becomes highly problematic for the study of non-capitalist economies.

Weird Karl Polanyi: The Great Transformation

Karl Polanyi’s celebrated The Great Transformation: The Political and Economic Origins of Our Time (1944 and reprinted many times) would have to be one of the weirdest books on economics. It has some searing insights, such as:

A self-adjusting market … could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness (p. 3).

No less a thinker than Adam Smith suggested that the division of labor in society was dependent upon the existence of markets, or, as he put it, upon man’s ‘propensity to barter, truck and exchange one thing for another’. This phrase was later to yield the concept of homo economicus. It retrospect it can be said that no misreading of the past ever proved more prophetic of the future (p. 45).

But then he goes on to make some massive blunders. The one that interests me has been deeply influential in the study of ancient economies: the distinction between reciprocal, redistributive, household and market economies (the third one is often forgotten in accounts of Polanyi). The distinctions should be obvious: reciprocity involves the complex patterns of gift-exchange, based on the principle of symmetry in organisation; redistribution assumes a centralised authority that distributes the goods gathered, the chieftain to which the hunter gives the kill bleeding all over his shoulder and back; householding is just that, taking care of the members of one’s group and operating on the lines of organisational autarchy; and markets he assumes to be profit-making ventures that operate according to barter.

So what’s wrong with all of this? Apart from the smaller point that most markets throughout history have not operated in terms of profit, he assumes that all economies up to capitalism are basically the same. From the grunting hunter to the feudal lord, from the penetrating slave master to the peasant in the village-commune, deep down all operate on the same economic basis. One groans when reading it now, wondering how such a position could have produced the insights that it has, how it has influenced so many. The second major problem is one shared by David Graeber’s book on debt: anthropology provides the secret to an unchanging human nature. His deepest debts are to Thurnwald and Malinowski, but the trap is that these flawed works on far-clung, exotic and supposedly ‘primitive’ societies show us what we are all like, with the accretions of civilisation stripped back. Much like Adam and Eve, I guess.

On the international division of labour and the invisible hand (-shake of corruption)

Alain Lipietz again:

Ricardo and the supporters of the Heckscher-Ohlin-Samuelson theorem seem, for instance, to believe that the international division of labour is the result of some world conference at which brilliant economists explained to an admiring gallery of politicians that – given relative levels of productivity, collective preferences and the initial endowment of factors – the free play of market forces would ensure the optimal division of production, and that each participant then went home convinced not only of the virtues of free trade but that the law of comparative costs ensured that the lot that had fallen to his or her country was quite justified, and that they could therefore force it to adopt the requisite specialization.

The problem with all of this is of course – now with a turn to Adam Smith – that the ‘invisible hand of the market’ is actually ‘the invisible handshake of corruption or the eminently audible boots of the military’.

Lipietz, Miracles and Mirages, pp. 16-17.