icon 0
icon TOP UP
rightIcon
icon Reading History
rightIcon
icon Log out
rightIcon
icon Get the APP
rightIcon

Political Thought in England from Locke to Bentham

Chapter 7 THE FOUNDATIONS OF ECONOMIC LIBERALISM

Word Count: 6732    |    Released on: 01/12/2017

ial 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

ple, 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 gre

ciety 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, h

19, 1621. Works (e

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

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 poin

vidual 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 wa

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 atten

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

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

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 al

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

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. Th

us 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 no

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 becaus

I

tion 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

self. 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 o

lled 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 econo

ted 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

l 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

e 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 le

h, 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

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

hether 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 hum

IOGR

It attempts only to enumerate the more obvious sour

NE

Thought in the Eighteenth Century

ry of England in th

he Seventeenth and Eighteenth Centuries in the C

y and Political Eco

Sketch of Liberty and Equalit

Claim Your Bonus at the APP

Open