“The rich man glories in his riches, because he feels that they naturally draw upon him the attention of the world…At the thought of this, his heart seems to swell and dilate itself within him, and he is fonder of his wealth, upon this account, than for all the other advantages it procures him.”
Adam Smith, Theory of Moral Sentiments (1759)
Though it has been more than two centuries since Adam Smith, a capable review of his writings would be well advised. In essence, such a retrospective look could prove clarifying. Among other things, it could help to explain Americans’ incessant search for gratuitous wealth.
It remains an incoherent search, one that impairs the broader society in several different and force-multiplying ways. Currently, even the standard American wealth policy preference for strong retail sales is proving injurious. This preference, prima facie, increases inflation and animates future interest rate hikes by the Federal Reserve. US retail sales jumped 3% in January 2023, the most since March 2021.
Whatever its apparent strengths and debilities, the American economic realm exhibits antecedent thought. For better or for worse, this realm represents not just self-centered considerations of money and finance, but also the cumulative outcome of humane analytic examinations. These examinations should always be premised on the unifying idea of “system,” that is, on the unceasing interrelatedness of all things.
To a fine point, economics and the recent pandemic are inextricably intertwined. It would be futile, therefore, to expect any progress in the other-directed (“attention-seeking”) world described by Adam Smith without also achieving certain science-based advances. In philosophic terms, the connections inevitably come down to this “equation”: Death is the prototype of all injustice – including economic failure – and American death rates during periods of “plague” are especially unjust. Here, together with certain other tangible standards of epidemiology, mortality figures are closely linked to national wealth distributions.
There is more. Intellectual obligations are overriding. Immediately, in such matters, Americans should learn to go beyond the banal observations and clichés of the country’s acrimonious national politics. This means purposefully recalling classical economic theory in its most densely-layered and nuanced content. Accordingly, we ought now to look with suitably “modernized” detail at Adam Smith’s Theory of Moral Sentiments (1759) and also at his better-known Inquiry into the Nature and Causes of the Wealth of Nations (1776).
Back in the 18th century, and without any benefit of computers or electricity, Smith managed to examine the bewilderingly complex elements of international trade policies within a broad intellectual context. Our current and upcoming political leaderships should at least recall such informed background, and work to bring it into line with purposeful national policies. The outcome could help an other-directed nation better understand its most persistent policy distortions.
Adam Smith knew many things. Among most evident and most important, he understood that thoughtful economic insights were not just about impressive fiscal numbers or expanding personal bank accounts. Wealth was not published in 1776 to advance the monetary or social interests of any one particular class or another. Rather, at a time when cultural and historical literacy were still expected of public commentators, Wealth’s author acknowledged the essential “oneness” of human affairs. In essence, this meant the core human singularity hailed, among others, by Marcus Aurelius, Lucretius and the Jewish Scriptures, not to mention both Hinduism and Buddhism.
Without such an acknowledgment, Adam Smith would have amounted to little more than the barely-literate and half-educated commentators we Americans are currently forced to endure. Abjuring banalities, this seminal economic thinker from Scotland sought to understand the most intricate operations of society and the market place, including their more-or-less plausible interactions. Surely he would have agreed with German philosopher Friedrich Nietzsche’s later instruction in Zarathustra never to seek the “higher man” at a “marketplace.” Significantly, as we can recall the dissembling Trump years, Smith had taken special pains to highlight the errors of baseless protectionist strategies, most notably contrived tariffs that could easily be reciprocated.
There is more. Famously, economist Smith identified an “invisible hand,” a credible “convergence of satisfactions.” Together with any such gainful fusion, he calculated, the perpetual collisions of individual self-interest with the presumed interests of nations could generally be reconciled. Eventually, in the language of today’s career economists or financial managers, such reconciliations could prove “optimal.”
How might such classical insights help us today? What might this 18th-century stance on money and markets have to do with our present-day American economic system, a complex network functioning as part of a much larger worldwide economy and civilization? The best answer should begin with questioning the widespread American belief that accelerating consumption is gainful per se or even indispensable. As for salutary effects on the country’s general welfare, there can be little doubt that these consequences remain examples of analytic simplification and intellectual disfigurement.
Regarding the United States, Adam Smith was prophetic. Let us be candid. In the United States, economics is really about “attention.” In this deeply anti-intellectual country, you are what you buy.
Though never a plutocrat, Adam Smith argued persuasively that certain arrangements of private wealth enhancement could at least permit the poor to live tolerably. Rejecting contemporary Jean Jacques Rousseau’s expressly contrary position – that is, that “the privileged few…gorge themselves with superfluities, while the starving multitude are in want of the bare necessities of life” – he foresaw in capitalism not just an enviably rising productivity, but the necessary foundations for political liberty. In judging whether or not he was correct in this assessment, the answer will ultimately depend upon who is being queried.
Karl Marx (lambasted by American politicians, but never actually read) offered an alternate view to Smith’s general optimism on capitalism. From the standpoint of his own formal disciplinary framework – a multi-layered academic context fashioned with analytic dexterity and authentic scientific underpinnings -Marx saw in capitalism a corrosive source of personal defilement and communal self-destruction. Was he entirely mistaken?
In his own time, Adam Smith was undaunted by any determinedly specious political arguments detached from meaningful considerations of intellect and learning. By applying various capitalistic modes of production and exchange, he asserted, an inextinguishable social inequality could still be reconciled with measurable increments of human progress. In those troubling cases where prevailing facts could have taken him in starkly different directions, he could have felt bound to accept certain corresponding modifications of his basic socio-economic theories.
Even among former US President Donald Trump’s most senior economic advisors, there never was an Adam Smith, never anyone who was even minimally capable of comparably complex intellectual understandings. However much these servile advisors may have sought to wrap themselves in certain quotable insights of Wealth, they wittingly ignored the depth and exertions of Smith’s conceptual thought. Unsurprisingly, they freely disregarded that Adam Smith’s preferred system of “perfect liberty” could never be made consistent with the partisan encouragements of a fevered accumulation.
The injurious legacy of these sycophantic advisors continues to direct and define Trump’s would-be successors.
There is more. Back when the United States was officially “born,” on a date that coincides with publication of Wealth, Adam Smith already understood what later-day Trump trade policies so blatantly disregarded. This is that certain inexorable laws of the marketplace, driven by natural human competition, demand a principled disdain for vanity-driven consumption. It’s not a particularly complicated set of laws. But it does call for at least some modicum of serious study and intellectual exertion.
Adam Smith could never have championed or abided “conspicuous consumption,” a phrase that would later be used more popularly and effectively by sociologist Thorsten Veblen. This most vulgar species of consumption, one driven by variously recalcitrant cravings related to feelings of individual self-worth, ought never be mistaken as a rational engine for economic or social improvement. This point should resonate loudly and instructively with all who would still heap gratuitous praise upon a Trump White House that equated personal financial success (however garnered) with the “attentive” envy of others. Under no imaginable circumstances could Adam Smith have favored a system of consumption premised on the notion that material acquisition should stem from a wish to impress others.
Never.
Adam Smith understood the psychological and economic dynamics of “conspicuous consumption.” But he also feared and perhaps even loathed these frivolous dynamics. From his personal point of view, it was reasonable that the marketplace should regulate the price and quantity of available goods according to “natural” arbiters of public demand. This marketplace, he urged convincingly, should never be manipulated from above, either by governments or by deceptively manipulative government policies.
With the Trump presidency, Americans lost all residual sight of Adam Smith’s “natural liberty.” In vain, this nation still attempts to construct a viable economic posture upon shallow slogans and empty witticisms. At the core, our derivative national problems of orchestrated trade barriers and adrenalized hyper-consumption are not fundamentally or genuinely economic. Rather, as Smith himself would have warned, because they are spurred on by seemingly ineradicable personal doubts of self-worth and self-esteem, these problems should be examined at readily identifiable psychological levels.
But who today would even want to undertake such a complex examination?
What would be the incentives?
Most Americans already believe that their national economic efforts should be oriented toward status-based purchasing. Oddly enough, however, almost no one seeks to inquire: “What sort of society should we expect from an economic system that is based upon feverish social imitation and embarrassing crass conformance”? The answer, in part, is a flaccid society of “mass,” a disordered and disordering amalgam of non-reasoning people who no longer expected to operate as thinking individuals.
Writing in the middle of the nineteenth century, the American Transcendentalist philosopher, Ralph Waldo Emerson, remarked presciently on “self-reliance.” Any foolish “reliance upon property,” Emerson warned, is the predictable result of a “want of self-reliance.” But what suitable corrective was needed? Emerson answered succinctly, and without any discernible hesitation: “High thinking and plain living.”
Can anyone in the present-day United States even begin to understand such clear and compelling advice? How far have we come from such a once hopeful conjunction? Today, the relentlessly conformist call of American mass society remains loud, exploitative and distressingly persuasive. This was especially the case under the aegis of a president who conducted a ceaseless and systematic war upon intellect, education and learning. “I love the poorly educated,” said Trump during his 2016 presidential election campaign. “Intellect rots the brain,” said Third Reich Minister of Propaganda in 1934.
The difference between these sentiments is not nearly as great as might first appear.
In his Theory of Moral Sentiments, Adam Smith noted that human beings are not made happier by their possessions, but that the rich, in seeking the “gratification of their own vain and insatiable desires,” may still (though unwittingly) advance the “interest of society.” With remarkable originality, Smith explained that the wealthiest members of the nation, without consciously intending any such generalized benefit, “are led by an invisible hand” to bring forth necessary reductions in social inequality.
Back in the 18th century, Adam Smith would have shuddered with any foreknowledge of today’s callous system of American economic exchange. This is the case not only because he would have been unsympathetic to the self-seeking supporters of an inglorious plutocracy, but because he would also have recognized the implacable consequences of any market theory founded on self-delusion. As long as our American economy remains animated, at its core, by rabid conspicuous consumption and by trade wars, an accelerating process of class/cultural conflict will be our principal driving narrative.
As long as we inhabit a society that. at least in significant part, takes an evident pride in a doctrinaire anti-intellectualism, disease and economic dislocation will not merely coincide. They will crush out any tangibly discernible remnants of a once-promising American civilization. But then it will already be too late for any pertinent national rescue.
At this fearful moment, one when “plague” and nuclear war could erupt more-or-less simultaneously, the “whole” of an American catastrophic outcome could exceed the sum of its grievous “parts.” In the end, learning from Adam Smith, warnings about this portentous product could be anything but hyperbole. As always, thinking seriously is a sine qua non for survival, but such thinking must be undertaken in advance.
Always.
In candor, few Americans (and certainly few American politicians) could conceivably read and understand Adam Smith. But there is still abundant cause for broader American society to favor Reason over political manipulation and contrivance. Any failure to understand this vital obligation during a “force-multiplying” time of disease pandemic and economic uncertainty could be more than just discomfiting. It could prove abundantly and irremediably lethal.
So what happens then?