John Burnheim send me the following response to reading my essay of some years ago “Adam Smith is to Markets as Jane Austen is to Marriage“. I think it’s terrifically interesting.
Adam Smith Today
The relation between Smith and Austen is very interesting. Austen’s characters are normally very sensitive to the injunctions of the prevailing moral standards in ways that Smith’ psychology of morals suggests. For them, morality is not a set of arbitrary restrictions on what they want to do, imposed on them by God or “society”, but a basic part of what they see as their true selves. In this attitude they rejoin the ancient philosophers, but without their metaphysical justifications. No loss, in my opinion.
The weakness of this psychology as a foundation of moral education is that it depends on the young being gradually drawn into a society whose standards appeal to them as consistent and sensitive to what matters to them. It works very well up to adolescence. But it is easy for adolescents to react against a family and a society they find dull and trivial, especially when they find others who share their discontent and offer a sort of collective justification of their revolt. Some fail to recover any sense of identification with prevailing moral aspirations and fall into an amoral mentality. Others are saved by love and friendships. Others become aware of the social importance of at least appearing to observe morality. Add to that the fact that there are many opportunities to gain advantages from deceiving others, and one has to predict a good deal of hypocrisy.
Does that matter? I would suggest that it doesn’t as long as there is vigorous moral debate, sustained by people who are deeply concerned about one or more of the three basic kinds of moral values:
- what qualities befit a person as an agent;
- what rules make for the common good; and
- what are we entitled to demand of each other.
If an individual is unconcerned about such matters, so much are they the poorer. They can hardly avoid external conformity to most of the prevailing morality. A hollow life.
A basic fact about the framework of our lives is that it consists mainly of conventions, language, body language, social skills which have to be learned if one is to engage successfully with both other people and the world around us. To be assured that we have got these conventions right we need approbation, not just in childhood but in the higher levels of knowledge and expression for as long as we live. At the same time, precisely because they are conventions they are changeable, often by causes we cannot fully understand. It is of fundamental importance to their worth and ours that the process of critical public debate goes as far as it can towards giving due consideration to all the relevant factors that our conventions are meant to enable us to coordinate with others. In this endeavour, as in all our achievements, success in solving one problem leads on to uncovering another.
It is inevitable that while for some this process is engaging and exciting, it can offer no guarantee of success to those who need reassurance and consensus, respect for familiar conventions. It is also the case that achieving sound conventions is so much easier in relatively small and culturally homogeneous societies than in large and multicultural societies that many are drawn to moral parochialism. In facing this problem, we are torn between having recourse to abstract but universal formulae on the one hand, and admitting that many people need a certain cultural relativism relating the validity of moral conventions to their particular culture. Philosophically we might represent the problem as the conflict between the universalism of Kantian pure reason and Hume’s naturalistic sentimentalism.
Both of those mutually exclusive positions are conceptually inadequate. Smith, I believe, offers a way of grounding the objectivity that Kant seeks and the motivational ground that Hume seeks in an ongoing process of attempting to find more adequate moral rules. What needs to be added to Smith’s account is a more adequate conception of societies, particularly in view of episodic, cheap and quick global communications and interactions. We all contribute to and draw on many different networks, many more than as individuals we consciously identify with or even comprehend.
It is very important to our wellbeing that the processes and procedures by which these networks operate tend to produce both the effects on which we rely and sufficient information to enable those most closely involved to make sound decisions about how to regulate the processes and procedures involved. Both as individuals and as groups, we depend on that network of networks to know what to expect and react to it appropriately.
I would argue that the totalising tendency of nationalistic democracy is obsolete and harmful in the world of interdependencies in which we have to live. We have to look to ways in which different networks are regulated by those most closely involved in or affected by the operation of each important network. The networks may be seen as organisms that adapt to and nourish each other, thus forming an ecosystem without any all-embracing plan or director.
The principal networks that regulate the interactions of other networks are markets that bring together producers and consumers of certain specialised kinds of goods and services, while all commodity markets are regulated to some extent by money markets and markets of access to resources.
Markets automatically establish standardised patterns of products and prices that enable meaningful planning and comparative assessments of commodities on the part of regular producers and consumers. These markets are linked in relation to markets in money and resources, which in turn produce a pattern of rents which for money and resources are made available.
In addition rules and understandings grow out of and warrant expectations about the accuracy and comprehensiveness of relevant information supplied by producers. The group develop a moral code governing their activities. It may appear that the moral force of such codes is lost when most players in a market are no longer individuals but firms. But firms of any size are bureaucracies in which employees are required to act within a certain role and obey the rules relevant to their tasks. Where employees are encouraged to break those rules it will not be long before they do so in their own interest rather than that of the firm. They are aware that if their breach of the ethics of the market is exposed, it is they who will be blamed by their superiors who gave them that licence to offend.
A good reputation is both a valuable asset and a source of pride in work. However, given the ease and speed at which information can now be gathered and broadcast, reputations are very vulnerable. At the same time technological change and changes in lifestyles are so rapid that the quick profit now at the risk of losing reputation becomes more attractive, especially when investors are focussed on quick returns and executives are also rewarded for quick returns. Perhaps a system of independent auditors who would assess and publicise the soundness of executive policies might help restore incentives in favour of responsibility and trustworthiness.
There is a lot more to be said about money markets, land and labour markets and trading in items whose value is almost wholly a matter of scarcity rather than utility. But I must stop.