Summary: A multi-aspectual understanding can throw fresh light on Adam Smith, especially his famous ideas of self-love and invisible hand.
Status of page: - in Some merging of text needed; - in need of critique discussion; - some references needed.
Adam Smith, acclaimed by many as The Father of Economics, was a pioneer in trying to understand the economic aspect and how it operates, and his attempt is set out in his The Wealth of Nations. His ideas have been severely criticised, not least because the kind of economics that apparently emerged from his ideas has done a lot of harm. Some attack his ideas; some defend them. This is especially true of two famous phrases that he used, "self-love" and "invisible hand".
It is easy to overlook the insights he brings. He was a pioneer, finding new paths through thickets of complexity that is economics. If his paths wandered a bit, if he left off exploring some of them, or even if he missed some paths, we cannot blame him; it is for us to straighten, continue or discover those. Here we briefly indicate how a Dooyeweerdian perspective, as outlined in Chapter 3, might help us find the insights and yet clearly understand what is flawed, in Smith's seminal ideas, and what might be done about it.
Our discussion of Smith here must necessarily be brief and indicative. Though we pass comment on his ideas, that is not our main purpose; rather it is to suggest how the ideas in this Rethink may be applied to help us understand a great thinker from a different perspective, which might reveal fresh insights and yet be true to the thinker and connect with current thinking.
Summary: Smith's ideas were influenced by the Scottish Reformation and recent economic history.
We have to understand a thinker in their context, two contexts: their own historical and cultural context, and that of how people think of him since then.
Guided by our perspectives set out in Chapter 3, of respect for everyday experience, the limitations of theoretical thinking, multiple spheres of meaningfulness, of alertness to presuppositions like ground-motives, and the importance of religion, especially Christianity, we seek to understand, not the details or well-known ideas of Adam Smith, but the deeper influences on his thought and what was meaningful to him, from his own everyday experience, religious context, as well as the movements of thought around him at the time. We treat him, not as two people (as some do) but as a person whose ideas developed.
Adam Smith was born in Kirkaldy in Fife, Scotland on 5th June 1723, growing up with a devoted mother (his father having died a few months before he was born), a devotion he reciprocated for the rest of his life. He lived shortly after the Scottish Parliament had united with the English, some say from treachery, others that Scotland's economy was struggling, too dependent on agricultural exports. Its recent union with its much larger and more developed rival both threatened it and gave it an opportunity, and the Scottish economy began to grow. The County of Fife had always seen itself as different from the rest of Scotland ("the Kingdom of Fife").
Smith was given a good, though not privileged, education, first in a renouwned Burgh school, then in Glasgow University. Glasgow was become rich from the tobacco trade (and slavery). Unlike England, where only an elite were deemed worthy of education, Scotland had a long tradition of compulsory education for all, arising from the Scottish Reformation led by John Knox (in the grounds that all people are made in the Image of God and therefore worth educating). Smith loved learning, thinking and questioning (in order to understand rather than in order to oppose). His interests covered mathematics, physics (Isaac Newton's ideas were recent), language, sociality, as well as morals and economics. From there he went to study at Balliol College, Oxford University, then one of the worst centres of learning, lazy, backward and "mired in internal rivalries, dullness and debt" [Norman 2018, 21]. Yet Smith was humble and dedicated, so that even from this he learned a lot about the human condition, which would later turn up in his theories and also make him and his Scottish accent more acceptable.
With all this, he became prepared in both attitude and mindset to think differently and broadly, and make significant contributes in several spheres of learning. He respected and listened to new ideas, including those of his mentors Hutcheson and Hume, while remaining independent of them, always seeking to understand fundamental principles in each sphere. He wanted, like them, to understand humans as a whole, in all their diversity of functioning, his Philosophical Inquiries, Principles of Rhetoric, Theory of Moral Sentiments and The Wealth of Nations emerged from this quest.
Summary: Smith's ideas have been misunderstood, and have been criticised from both within and outwith economics. At the root of this lies worldview (mindset).
Many from neoclassical, Austrian, Marxist, Keynesian, developmental, institutional, behavioral and other schools of economics like to trace lineage back to Adam Smith [c.f. Norman, 144-5]. Many also criticise Smith. Much of both arise from misunderstandings, which Norman [2018] calls five myths.
Myth 1, Adam Smith's Wealth of Nations contradicts his Moral Sentiments - called by German scholars "Das Adam Smith Problem". Norman [p.160-3] argues this is false, as does Sagar [2022], that the two great works are harmonious, that Smith was the same person, did not change his mind but was rather writing about two completely different topics. Below, we suggest he was facing up squarely to the irreducible distinctness of two aspects.
Myth 2, that Smith advocated self-interest, arises from Smith's belief that "self-love" lies at the root of economics. Norman [p.163-6] shows that the two are completely different, with self-interest being a negative, while self-love is positive, being "proper care on one's own self and the cultivation of personal virtues". We discuss below that, when stressing "self-love" as opposed to benificence, Smith might have been seeking for the meaning-kernel of the economic aspect.
Myth 3, that Smith was pro-rich, is clearly dismissed by many reference to Smith's works by Norman [p.166-7]. Rather, Smith wanted wealth for all, especially the poor, possibly because he had grown up in an impoverished Scotland in which market activity was beginning to raise the standards of living. Norman remarks [p.167], "Smith is astonishingly egalitarian in outlook."
Myth 4, Smith was anti-Government [Norman, 167-171]. Smith was aware that markets are sustained by trust and confidence, which rely on law and government, and can slump if left to themselves. What Smith wanted was the "clearing away of particular impediments to trade such as subsidies and tariffs" [Norman, 169]. Below, we shall attempt to understand this via aspects.
Myth 5, that Smith was first and foremost an economist. As we remarked above, his interests were very wide and he made contributions in several areas (even the history of astronomy). Norman [p.171-3] argues that Smith saw himself as a philosopher, whose worldview was "the embedding of market activity within a normative ethical and social framework." Again, we shall understand this below via aspects.
These myths have arisen from mis- or partial readings of Smith, which arose from presuppositions (mindsets) about what is meaningful and what is not.
Many have critiqued Smith on the basis of those myths and so, though their critiques may contain useful insight, they are less valid than they ought to be, if Norman is correct. However there are also other types of critique, one type from outwith economics, reckoning it as embedded among other spheres of life, as Smith did, and one from within economics, using only concepts meaningful in the economic aspect.
An example of the first is Mueller [===], who argues that, of the four concerns of Scholastic Economics, from Aquinas, Augustine and Aristotle (which goods we produce, justice in exchange, to whom goods are distributed, and which goods people prefer to consume (utility)), Smith focused on only two and ignored the last two and moreover reduced the theory of production to labour. "In trying to reduce human behavior to exchanges, modern economists have forgotten how these essential motivations are expressed which is as personal or collective gifts (and their opposite, crimes)." Whether he is correct or not, his critique sets Smith's ideas in a wider context.
An example of the second is to argue that Smith's idea of self-love-motivated exchange leads to wasteful consumption Veblen [2012] and wasteful production Zhang [2022], such as of tourism and the private motor vehicle. Therefore, if they are correct, Smith's economic theories actually undermine their own intent: wasteful consumption is something that Smith greatly disliked even though he professed faith in "an invisible hand" that could bring some good out of it. (In Chapter 7 we discuss wasteful production under the term "Useless" economic activity.)
The irony is that Zhang and Veblen find they cannot remain totally within economics, but resort to things meaningful in other aspects, such as the "selfish propensity for preservation, domination and coercion". Zhang argues that this waste cannot be explained by market imperfections, government interference or transaction costs, but from worldviews that lie at the root (which he also calls "quasi-religion"), in particular from Nietzschean secularism, which was pitted against "ascetic Protestantism". Beliefs inspired by Nietzsche about self-promotion and self-will have led to a cruel, destructive neoliberalism, and wasteful production comes from this, not from Smith's idea of self-love.
Now, a worldview (part of mindset) is a stance in which certain aspects are seen as primarily meaningful, and we would argue that the undermining arises from omitting important aspects. These examples actually support Smith's, and our (see Chapter 4), view of the inescapable embeddedness of economics among other spheres and the importance of worldview.
In order to elaborate how our Rethink can contribute to understanding Adam Smith's Wealth of Nations, we briefly discuss what are probably Smith's two most famous ideas, invisible hand and self-love, to discern what insight might be valid in them from our perspective, which lie at least at the back of the original thinker's mind, often hidden by words and arguments set down in the context of their times. We use our Dooyeweerdian approach to do so.
Summary: Might Smith's idea of invisible hand refer to the idea of a law-side to reality that enables and guides economic activity in certain directions, because aspects of reality are irreducibly distinct and yet intertwined?
In his Theory of Moral Sentiments, Smith wrote,
"The proud and unfeeling landlord views his extensive fields, and without a thought for the wants of his brethren, in imagination consumes himself the whole harvest ... [Yet] the capacity of his stomach bears no proportion to the immensity of his desires ... the rest he will be obliged to distribute among those, who prepare, in the nicest manner, that little which he himself makes use of, among those who fit up the palace in which this little is to be consumed, among those who provide and keep in order all the different baubles and trinkets which are employed in the economy of greatness; all of whom thus derive from his luxury and caprice, that share of the necessaries of life, which they would in vain have expected from his humanity or his justice ... The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, ... they divide with the poor the produce of all their improvements ... They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition."
That is, when we operate properly economically (which current economics does not!) this will open ways towards justice, love and other Good things.
In these days of heightened sensitivity to quantitative inequalities of wealth, Smith's "nearly" might be fiercely declaimed, but in less materialistic, angry and ungrateful cultures, we might be able to accept the validity of Smith's acceptance of some inequalities in wealth. Indeed, we might even see the beggar sunning himself on the side of the highway who has all the security that kings fight for as made possible because there are aspects other than wealth that constitute Good. In The Wealth of Nations, Smith wrote,
"... he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention [namely, the general good]."
In both, Adam Smith seems to be making the point that, despite the selfishness of the wealthy, the poor can benefit because of the way the economic aspect operates (i.e. its fundamental laws) and not wholly depending on benevolence of individuals or government. He wanted to find and propose that an answer to the societal evil of the selfishness of the wealthy may be found, not just in benevolence and charity, which were too subjective and unreliable====, but in the laws of the economic aspect. Is that what Smith meant by "an invisible hand", at the back of his mind?
It may be. Smith actually introduced an idea of 'invisible hand' in his History of Astronomy, where he claims that the "invisible hand of Jupiter" is invoked by "savages" to explain the "irregular events of nature" such as thunders and storms. Though Andreozzi [2004, 5] sees this as a "notorious" use of the term "with a completely different meaning", we can see it as similar, if we allow invisible hand to mean "the working of the laws of each aspect" - the physical in the case weather, ethical in Moral Sentiments and economic in Wealth - and that it is "invisible" to those who are not aware of those laws in their various aspects, whether today or centuries ago.
That the economic aspect tends to bring some good despite evil is an interesting idea. It is not dissimilar to Augustine's idea that politics is made possible as a way of curbing evil in a fallen world. Though not all would agree with that [Note: Politics] the idea contains a useful insight that maybe the way an aspect operates is such that, despite evil, some good can come, often in different aspects - such as juridical-ethical evil and economic good. (So, even though some philanthropists might be selfish in their motives, they can still bring some Good.) We might imagine Hutcheson telling Smith that this was because each aspect had been 'designed' by the Creator to ensure this - if Hutcheson had time-travelled to learn from Dooyeweerd! In each aspect there are analogical echoes of others; the economic aspect contains, in its fundamental laws, something that tends towards some measure of justice for the poor. If Smith and Dooyeweerd are correct, this is glorious!
We must never make that an excuse for our attitudes, however. Many have taken Smith's argument to excuse their own affluent, unconcerned lifestyles, relying unquestioningly and hypocritically on "the market" to sort out the problems that they conveniently do not attend to and, in academic theory, to support the discredited Trickle-Down Economics. This is a travesty of what Smith (x and the Creator x) intended. In our view, that is not just a matter of economic theory and practice, but is revealed as a matter of mindset and attitude, which impact economic activity retrocipatorily, and it will be condemned as such more harshly.
Whether or not we allow any idea of Providence, we see Smith working as though there is an effectual law-like reality [Norman 2018] that operates regardless of our intentions and actual behaviour and does so towards some kind of good. (x To Christians, "Providence" is God, Who designed the operation of all aspects, including the economic, created humans as equal, and it is humans who functioned to bring about unequal division! x)
This is what Dooyeweerd saw as the "law-side" of reality, comprising a 15 or some other number of aspects, each of which provides fundamental laws by which reality operates, as explained in §3-2. He saw the aspects as contributing Good, which we have cast as the idea of Overall Good (å3-5) to which functioning in all aspects should contribute. Thus In his Moral Sentiments he seemed to be arguing for the existence of such aspect(s).
That Smith used "invisible hand" in relation to economic activity implies that he was specifically referring how the economic aspect operates, and that he used "an" rather than "the", might suggest similar for other aspects.
If we understand it via Dooyeweerd, we can see the reasons it might be invisible. (a) In the pre-theoretical attitude of thought, the laws of aspects are not immediately obvious and, even when we take a theoretical attitude, not all become visible. For example, that the rich "consume little more than the poor" is a law meaningful in the economic aspect which does not become visible until we theoretically examine that aspect. (b) If we theoretically focus on the economic aspect then we do not see other aspects, nor the operation of their laws. The provision of material sustenance for P by W purchasing things from P (where P = the poor, W = the wealthy) is meaningful from the perspective of the economic aspect, but the apparent paradox of the selfishness of W providing good for P, is not; it is meaningful from the perspective of the ethical aspect, where selfishness is bad.
But it is not enough to postulate an invisible hand of an economic or any other aspect, but we must understand how it operates. This seems to be what Smith was trying to do for the economic and ethical aspects in Wealth of Nations and Moral Sentiments, and one point at which they meet is self-love.
Summary: Instead of referring to, or being used to excuse, selfishness, might "self-love" really refer to an attempt to work out the operation of the economic aspect without recourse to concepts meaningful in other aspects.
In his The Wealth of Nations, Smith wrote:
"In almost every other race of animals each individual, when it is grown up to maturity, is entirely independent, and in its natural state has occasion for the assistance of no other living creature. But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages." [our emphasis]
This is the only time he uses "self-love" (though he sometimes wrote of "own interest", "own advantage", etc.). Yet, since then most mainstream economics have (gleefully?) interpreted "self-love" as an excuse for selfishness and self-protection (dysfunction in the ethical aspect) to reign in economics, especially in the guise of the Rational Economic Actor, with disastrous and very harmful results (discussed in Chapters 2 and 7), especially when bloated with Nietzsche's norm of self-promotion.
But is that what Smith really meant? Did he really intend to succour the rampant selfishness that pervades economies today? Not at all! Throughout Smith's writings we find a deep antipathy to and disdain for the selfishness of the rich and aristocratic who spend their lives in "luxury and caprice" with a surfeit of "baubles and trinkets", as well as for the "proud and unfeeling landlord" [Moral Sentiments]. As Smith meant it here, self-love is very different from selfishness.
The meaning of a word used is often shown by what it is contrasted to. Both times above, self-love is contrasted to benevolence. Yet, what Smith is trying to argue against is not benevolence as such but the assumption that benevolence can be the total answer to poverty and can fully explain how the economic sphere ought to operate, an assumption often made by the wealthy who would "give of their wealth" (as Jesus put it). Did he not witness during his childbood the destitution that people suffered when the only way they could sustain themselves was begging and relying on the benevolence of others? Did he not observe the "torpor of the mind" [Smith, Moral Sentiments, 461] brought on by repetitive work demanded by the wealthy?
From a multi-aspectual perspective, it may be that what Smith was exploring was the possibility that there is an economic aspect of life that can operates for Good regardless of evil functioning in other aspects. Therefore, with the idea he labelled "self-love", was he trying to work out what enables that economic aspect to function in our lives without having to resort to ideas meaningful in other aspects, such as benevolence? That is, to discover some laws unique to the economic aspect? Smith wanted to identify the purely economic meaningfulness of why bakers make and sell bread, and he happened to use the word "self-love" to do so.
To Norman [2018], the meaning of self-love is "a person's regard to their own well-being, and their property, family, dependants, friends and reputation" [p.165]. To Buijs [2023], it involves not just the self but the other too: each party is motivated not just by their own benefit but also the benefit of the other equally, and possibly even of society; this encompasses how the economic aspect is foundationally dependent on the social (c.f. Smith's contrasting humans with animals).
Smith might not have had the explicit idea of aspects that we find in Dooyeweerd, but intuitively he knew that benevolence for example is of a different aspect (the ethical). The Good that the economic aspect allows is (at least) for a person to provide for their own or their family's "necessities and conveniences" of life, and that could be the motivation when seen through the lens of economics alone (which, we are suggesting, Smith was trying to do) "At least"? Buijs' "mutual benefit" extends this to the other too. And when we do bring in something akin to benevolence, the self-giving love of the ethical aspect, then economic activity becomes richer still.
So how could he describe it? He chose the word "self-love".
(We may ask whether it is invalid to seek motivations meaningful within the economic aspect, given that motivation itself is pistic functioning. Motivation is pistic functioning but targets another aspect, so we can meaningfully think about biological, linguistic, social, economic, ethical motivations, etc.)
Was he likewise, in his earlier Moral Sentiments, trying to understand the laws of the ethical aspect? ("the purpose of The Theory of Moral Sentiments is in part to set out an understanding of these phenomena in potentially lawlike terms" [Norman 2018, 181]).
Might Smith be considered to have prefigured Dooyeweerd's idea of distinct aspects, each with their different kernel meanings and laws? He did not perhaps have all the philosophical apparatus available to Dooyeweerd, but perhaps did what he could. Like Dooyeweerd, he respected his empirical pre-theoretical experience, using it to point the direction for the theories he built, and found interest in several spheres of thought, several aspects of reality.
Thus Smith might not be entirely guiltless in encouraging subsequent promotion of selfishness rather than merely valid "self-love" as proper "regard to their own". He did not clearly demarcate a boundary between them. Proper regard can so easily slip into selfish unconcern, and mutual interest, into self-serving cartels. Where does the boundary lie? On what grounds may we demarcate? Smith did not even discuss the grounds on which such a boundary may be demarcated. ===== see below on the demarcation, meaningful in later asp. And see if paras should be reordered.
Perhaps because of his historical context, he assumed the difference is obvious - between the honourable worker and the dishonourable, idle rich. He did not conceive of the time would come when even workers would aspire to and partly achieve lives of "luxury and caprice" with a surfeit of "baubles and trinkets" - as we have today in affluent cultures (starkly revealed wwhen we contrast with non-affluent cultures and consider our ecological footprint).
We may notice that self-love can be the hindrance to frugality, especially in its guise as selfishness. Frugality speaks of responsibility while self-love limits responsibility to the self and ignores others.
In his narrow focus on the economic aspect in Wealth of Nations, he may be seen as deliberately ignoring other aspects. Yet real-life economic activity is multi-aspectual functioning, not uni-aspectual, and cannot be adequately understood without reference to all the other aspects. For example, though benevolence should not be relied on to solve economic problems like poverty, it is not totally unimportant. Though Smith - with most of his society - might have disdained beggaring, will there not always be beggars, who do need benevolence? Is not this an intrinsic part of our economic activity? And is it not the case that the firms that began with benevolence ('Quaker capitalism') rather than greed are the ones that lasted a 100 yaers? This is why we need to take all aspects into account.
Reductionism is harmful, not merely an academic option, especially over the longer term. In treating trade as the solution to society's problems, may we even see signs of idolization here, e.g. in the vehemence of his reaction to even reasonable restrictions in medical training [Norman 2018, p.88]? That reductionaism is Adam Smith's failure, and why the economics he initiated (though others mis-developed) has led to so much harm to this day.
It is vital that we find a sound basis to demarcate between valid self-love and harmful selfishness. The difference between "self-love" and the selfishness he so disliked is meaningful in the ethical aspect, not the economic. Because the economic aspect precedes the ethical, this difference cannot be clearly understood from its perspective. This is why the boundary between them seems very blurred when viewed from the economic (and even that blurred view is possible only because of the analogical echoes of the ethical or the inescapability of our functioning in the ethical aspect simultaneously with the economic).
To turn the hope for valid (mutual) good into selfishness at the heart of economics is a problem, not of economics itself, but of ethical and pistic functioning, of attitude and mindset, both among economists and among politicians, pundits and public who use economics, as we discuss in Chapter 4.
Summary: Might there be some resonance between Smith and Dooyeweerd? Might we, with the help of Dooyeweerd, be able to place Adam Smith in a wider context, which allows both nuanced appreciation and critique?
We do not trace our lineage back to Smith in the way many others do [Norman, 144-5] but to something deeper and broader, which formed even Smith's own ideas: everyday experience and the idea that there are law-like realities by which economics works "despite" ourselves, and also morals work. So we stand alongside Smith rather than under or above him - but much dwarfed by him. Just as Smith's Wealth of Nations might be, this Rethink is an attempt to understand the workings of the economic aspect of reality and finds much affinity with him.
Our difference from Smith, and our advantage over him (which makes him even greater by comparison), is that we are 250 years later, we know what has emerged from his theories, economic activity has developed in ways Smith never conceived, and we are in an historically, eschatologically and planetary different context now. Most affluent economies today are no longer full of bakers and butchers, and while value-exchange is still a fundamental operation, it has changed almost beyond recognition, in its automation and in the kinds of goods and services exchanged. He worked in the emergence of market economies in which human labour would be as important as land, and in contexts he never conceived, (a) when the economic activity of the world is beyond the capacity of the planet to sustain, (b) when most people in affluent cultures are wealthy by global standards, more like the "proud and unfeeling landlord", than Smith's baker and butcher. If people in the UK, for instance, expect to spend only one third of their income on essentials (8% on food, 25% on housing) what do we spend the remaining 67% on but "baubles and trinkets" (as Adam Smith called them), many of which are procured for us by oppression, injustice and exploitation of the Earth that we excuse? Yet, we live within the same economic aspect as Smith did, and find it still gloriously operates for Good, in Smith's case to allow 'the poor' their necessities even without benevolence, in our case to disrupt our treasured economies and thus warn us when we disregard other aspects, especially the biotic, juridical, ethical and pistic, and also part of the economic aspect in the limits of the planet.
If Smith was, as suggested above, trying to explore and understand the laws and meaningfulness of distinct aspects, might he be considered to have prefigured Dooyeweerd? He did not perhaps have all the philosophical apparatus available to Dooyeweerd, such as a clearly-delineated suite of aspects, a worked out general theory of modal spheres as a coherent law-side of Reality, nor a clear recognition of the difference between the Humanist, Scholastic and Biblical ground-motives. ===== following is rp at end; where should it go? But he and Dooyeweerd emerged from the same religious root, a type of Calvinism touched with Celtic Christianity that respected the Creation and its diversity of meaning [Basden ===]. He was interested in at least both those two aspects - overcoming Norman's fifth myth.
On aspects, Smith had interests in mathematical-physical, lingual, economic and ethical-juridical, and developed ideas in all. Though he intuitively understood their mutual distinctness, and acknowledged that all were part of being human, he does not seem to have asked the philosophical question, "What aspects are there?" in the way Dooyeweerd (and also some systems thinkers) have now done. So he had no basis nor incentive to consider whether manufacturing, exchange and justice therein, for example, might be meaningful the formative, social and juridical aspects rather than the economic.
When thinking about the economic aspect itself, the fundamental norm he seems to presuppose for that aspect is provision of "necessities and conveniences" without "baubles and trinkets". This led him to a narrow focus division of labour and exchange, always involving money. Sadly, he explicitly limited his aim in Wealth of Nations to "explain in what has consisted the revenue" first of the "great body of people" and of the sovereign, and deliberately ignores the important economic activity of the household, especially food-growing, food-preparation and care. That he wanted to move away from land having value, to labour, might be understandable but is no excuse for completely ignoring the labour linked with food. As we discussed in Chapter 4, Dooyeweerd widens the kernel norm of the economic aspect to frugality and we extend the kernel meaning to sustainability of respected resources, in both of which exchange are parts. However, Smith's narrowed view is perhaps excusable, given the pioneering nature of his thinking. Indeed the themes of resource limits does inform his arguments about the invisible hand: even the wealthy are limited in ways they cannot ultimately control nor escape.
Though Smith worked at least implicitly from a presupposition of law-side of Creation, he seemed to have little explicit idea of its coherence, especially how our functioning in each aspect impacts that in others. There is little of economics in Moral Sentiments and little direct reference to morals in Wealth of Nations - though there is some implicit reference to each in each. Such inter-aspect interaction and analogical echoes seemed more important to Dooyeweerd than even delineating what aspects there are, and would help us see how MS and WN fit together. And, nowadays, how aspects like the biotic and physical, which Smith seems to have almost taken for granted are impacted by today's economics, and has ethical and pistic (attitude and mindset) impact. This is what we have been discussing in the chapter, and it might offer contributions to Smithian thought.
Regarding ground-motives, the gradual move in Europe from the Scholastic nature-grace ground-motive to the Humanist nature-freedom ground-motive was still underway; indeed the influence of earlier ground-motives never completely ideas out. Smith may be seen as operating within three ground-motives. His presupposition of a lawlike deeper reality that exerts an invisible hand, his intuition of multiple aspects (morals and economics not least), and his occasional reference to Providence, betrays some influence of the Biblical Creation-Fall-Redemption ground-motive. His dislike of zealous religion and his reaction towards rationality over against revelation, and also his confining his religious belief to a compartment of his life separate from his academic thinking, betray some influence of the Scholastic nature-grace ground-motive. His willing adoption of the Enlightenment project in the latter shows his main influence was the Humanist nature-freedom ground-motive. The latter exerted enormous pressure on the development of his ideas, to be too rationalistic and reductionist, for example in short-sightedly hoping that non-economic problems like injustice would be completely solved by the workings of trade alone, and his idolization of trade. Yet, to place him solely in one or other of these, especially solely within the third, is to misunderstand him and treat him as a one-dimensional logician rather than a multi-dimensional fully human thinker. His economic theories, though seemingly Humanistic, are shot through with allusions to what is meaningful in the Biblical ground-motive.
It may be that a Dooyeweerdian perspective can help short-cut 250 years of following his ideas, developing them and reacting against them, to arrive more directly at the nuanced understanding of Adam Smith and economics therein that is emerging today. Most of us in the RLDG had absorbed some of the myths and either dismissed or supported Smith as seeming advocate of free-market economics, when one or two of our members challenged us to understand him properly. We discovered that we could do that without reading masses of the 250 years of discussion about Smith, because we were already sensitized to the multiple aspects and everyday perspective that occur in Smith's rich thinking and which are being rediscovered today, but which had been ignored during the intervening centuries. A similar phenomenon has been found in other fields: Dooyeweerd's aspects offer a short-cut to nuanced views that eventually and slowly emerge.
Smith and Dooyeweerd emerged from the same religious root, a type of Calvinism touched with Celtic Christianity, both of which valued the 'secular' spheres of Creation and its diversity of meaning, in contrast with the denigration of secular by Scholastic thought. How Smith's ideas align with and depart from Calvin is discussed by van der Kool [2022] (though he seems keener to emphasise the differences than the similarities), including the idea of God-originated laws that Smith and Dooyeweerd share. The Celtic influence, which occurred in both Scotland and the Low Countries, which is interested in goodness of Creation, is briefly suggested by Basden [2020, ===]. It is therefore little wonder that we find resonance between them. So we may expect some benefit from reinterpreting Smith from a Dooyeweerdian perspective.
The sharing of a perspective that later became much clearer philosophically in Dooyeweerd, might explain why Smith, alone, was able to produce such a stupendous, long-lasting work from within a newly emerging field.
Summary: Three fundamental errors in Smith's thinking are revealed by recognising the importance of belief and diversity of meaning. Turning away from them lets us hear more clearly what Smith was really getting at.
Our own comments on Adam Smith, from a Dooyeweerdian perspective, consists of three fundamental critiques and an application to today.
1. Smith was a child of the Enlightenment, the belief-movement that rightly drew attention to logical thinking but wrongly elevated and idolised it. That movement wanted especially to remove ethics/morals and beliefs from human thinking (maybe understandably so, because those had oppressively dominated thinking during the previous Scholastic centuries, Dooyeweerd's Nature-Grace Ground-motive). So it is no surprise if Smith also wanted to at least move such considerations aside while he cleared his path of economics - even though it is clear that he still valued them. Smith was also concerned with liberty, one pole of the yet-young Nature-Freedom ground-motive. Though perhaps over-influenced by his friend David Hume, Smith was not entirely enslaved to either ground-motive.
2. Reductionism. In trying to clearly differentiate the workings (laws) of the economic aspect from those of the juridical and ethical aspects in particular, he sometimes went too far and ended up trying to reduce them to economics. He argued or at least implied strongly that we may rely of the workings of the economic aspect to ensure justice and some measure of Good. What he should have done (in Dooyeweerdian retrospect!) is to have brought these aspects back in and discussed their relationships with the economic aspect, as we have done above. (He did occasionally do some of this, but allusively more than explicitly.)
Not only this, but he explicitly limits his aim in Wealth of Nations to "explain in what has consisted the revenue" first of the "great body of people" and of the sovereign. He sees only money, and deliberately ignores the important economic activity of the household, especially food-growing, food-preparation and care. That he wanted to move away from land having value, to labour, is no excuse for completely ignoring the labour linked with food.
3. Exchange. In trying to work out what was uniquely economic, he fixed on exchange rather than on resource limitations and frugality, as Dooyeweerd argued is the kernel norm of the economic aspect. Exchange is actually social rather than economic in its fundamental meaningfulness. As Dooyeweerd argues, the kernel meaningfulness and norm of the economic aspect is limits and frugality. Smith's mistake is perhaps excusable, given the pioneering nature of his thinking. Indeed the themes of resource limits does inform his arguments about the invisible hand: even the wealthy are limited in ways they cannot ultimately control nor escape.
4. Relevance to today. Most affluent economies today are no longer full of bakers and butchers, and while value-exchange is still a fundamental operation, it has changed almost beyond recognition, in its automation and in the kinds of goods exchanged (especially financial products). One idea remains, however: Smith's distinction between the valid, misnamed "self-love" of the baker and the selfishness of the wasteful wealthy. As mentioned above, in the affluent economies of today, have we not become more like the wealthy, like the "proud and unfeeling landlord", than the baker and butcher? Is not our world much more filled with artistes, wannabe musicians, influencers, designers, car-washers, dog-walkers, media pundits, and the like, than ever before? (Chapter 7 calls these "non-essentials".) If people in the UK, for instance, expect to spend only one third of their income on essentials (8% on food, 25% on housing) what do we spend the remaining 67% on but "baubles and trinkets" (as Adam Smith called them), many of which are procured for us by oppression and injustice, and by climate and environmental irresponsibility, that we excuse? Does this imply that Adam Smiths ideas no longer apply to our affluent economies or, to put it more strikingly, we are no longer worthy of Adam Smith, even with his errors?
A pioneer like Smith might be excused errors, yet Post-Smithian economics did not attempt to correct them. Instead, and even going further than Smith did in these very errors, Post-Smithian economics set off in a wrong direction, and has stubbornly continued that way ever since, leading us into disaster both for economics and for planet, health and society. The fault is not totally Adam Smith's; it is our own. Should not we in the affluent cultures that are destroying the Earth, urgently repent, change our attitude and mindset, and seek paths to where the economic aspect would truly lead us, no longer shackled by the Enlightenment, rejecting reductionism and focusing more on the true kernel of the economic aspect, limits rather than exchange?
Created 31 July 2023 from section in r6-fun. Last updated 1 August 2024 some wording and bolding; headings. 16 August 2024 The way aspects operate, designed to bring good despite evil. 9 November 2024 new styles; stated source. 11 November 2024 swapped Gentle, Critical. 13 November 2024 brought stuff from r6-fun. 5 December 2024 Astronomy invis hand. 31 March 2025 status merging); links corr. 9 April 2025 some mods to InvHand and SelfLove.