Thursday, July 11, 2013

Gavin Kennedy, Brad DeLong, & Jeff Weintraub on Adam Smith's social theory & moral philosophy

About a week ago I wrote a little critique of Adam Smith's conceptual sleight-of-hand on exchange, cooperation, and the foundations of social order in response to something that Brad DeLong had posted on his blog. I'm pleased to see that my piece has already provoked two responses in turn—a post by Gavin Kennedy titled Brad DeLong versus Jeff Weintraub and a post by Brad titled Gavin Kennedy and Jeff Weintraub on Adam Smith's Behavioral Economics and Moral Philosophy.

Neither of them is entirely happy with my interpretation of Smith's argument, but that's fine, since both of their posts are characteristically intelligent, interesting, erudite, and usefully thought-provoking.

I'm just about to go catch a plane, so I can't offer a substantial response to either of them right now.  For the moment, I will just recommend that anyone interested in these issues should go read their posts ... and I will also toss out a few quick remarks about Brad DeLong's post.  (I'm afraid these hasty remarks may be a bit cryptic unless you read his post, and perhaps even if you do.)

=>  On the whole, it seems to me that Brad and I are actually in fundamental accord on a lot of the important issues, though not quite so much on others.  Some examples of the latter (not a complete list, but a start):

The specific way in which Brad characterizes the distinction between "Hobbesians" and "Lockeans", and uses it to try to get economists off the hook, has some grains of truth but is, in my possibly fallible opinion, a bit strained and misleading.  I have various reasons for thinking that, but explaining why would require a longer discussion, so right now I'll just register the point.

Brad correctly notes that humans engage in patterns of reciprocity, including gift exchange, but I'm not sure that the implications of this point really help the argument he wants to make.  Patterns of reciprocity, which run through all forms of human society from the beginning, are characteristically structured by systems of mutual obligation—a concept notably, and significantly, absent from that key passage in Smith's Wealth of Nations that Brad had quoted.  And recognizing the important role that patterns of reciprocity (and redistribution) often play in coordinating social activity simply underlines the point that, contrary to what Smith says in those early chapters of WN, not all forms of "exchange" are market exchange, based on trucking and bartering and the calculation of self-interest.  Brad knows that, of course, but he tries to smooth over this problem by assimilating gift exchange, reciprocity, and market exchange as merely different examples of "exchange" that fall at different points on a single continuum.  There's something to that conceptual gambit, potentially ... but without some further refinement and specification, this bland assimilation serves to obscure some important analytical distinctions with very important theoretical and practical implications.  (As Marx once said, slightly misquoting Hegel, in the dark all cats are gray.)

Furthermore, no matter how far or how loosely one stretches the theoretical category of "exchange" (remember Lévi-Strauss?), "exchange" cannot simply be equated or conflated with conscious cooperation.  (They may well overlap in practice, but they're not simply the same thing.)  As I pointed out in my original post, both obligation and conscious cooperation, as possible bases for coordinating sustained and beneficial patterns of human action, are excluded from the false dichotomy that Smith constructs in Chapter 2 of Book I of WN and then uses to help lay the foundation for developing the core theory in that book.


Brad DeLong and Gavin Kennedy also point out, quite correctly, that Smith's knowledge and understanding of society, history, personality, culture, psychology, and morality are much richer, more comprehensive, and more complex than those of most of his disciples in "classical" political economy, mainstream neo-classical economics, and the great bulk of so-called "rational actor" analysis.  (I would still say that it's not without gaps and problems, but it's impressively wide-ranging and sophisticated, for sure.)  Anyone familiar with Smith's work as a whole (or even just Book III in WN) will readily acknowledge that.  But in my own discussion I wasn't trying to address Smith's work as a whole.  Instead, I was examining some of the key foundations of Smith's (highly sophisticated and immensely influential) core theory in The Wealth of Nations, which is laid out primarily in Books I-II and then elaborated and applied through most of the rest of the book (with some attempts in Book III to address, and resolve, some theoretical anomalies and loose ends).  And at the heart of that core theory, as Brad nicely captured it, is the notion of "exchange [which Smith explicitly identifies with self-interested exchange] and its vicissitudes as fundamental to human psychology and society".

=>  To help drive home that last point, I will close by highlighting this passage in Brad's discussion:
In Books I and II of WN, Smith definitely does write as if self-interest mediated by exchange is at the foundation of the social order. But Adam Smith the moral philosopher (as opposed to Adam Smith the proto-economist attempting to disrupt the 18th century discipline of "political oeconomy") does not believe that. And it is not true.
Precisely. This gets at the heart of the matter, and on this we agree. (OK, not completely, but almost completely).  Everything else is details and commentary ...  though, of course, they're important, too.

Meanwhile, it's gratifying to be able break off on this note of agreement.  More on these matters in the near future, perhaps.

Yours for the republic of letters,
Jeff Weintraub