From: Dogan Goecmen (Dogangoecmen@AOL.COM)
Date: Thu Nov 30 2006 - 05:41:48 EST
Hi Martin
Thank you for your question and encouraging comments. The concept of
alienation is a core theme that runs through the all major writings of Scottish
philosophers. Especially, in the works of A. Smith (TMS and WN), A. Ferguson
('History of Civil Society'), Th. Reid (esp. 2nd volume of his works) and J.
Millar (Distinction of Ranks) it occupies a central place.
May I ask you to explore how Schumpeter draws the distinction between the
history of economic ideas and the history of economic thought. My choice was
made very consciously because the major Scottish philosophers were very
skeptical about the concept of ideas.
Best regards
Dogan
In einer eMail vom 30.11.2006 11:23:14 Westeuropäische Normalzeit schreibt
Martin.Kragh@HHS.SE:
Hi Dogan!
I'm just curious, exactly where can we find concepts of alienation in
Scottish thought? You wrote:
"Smith and other Scottish philosophers employ in this connection the concept
of alienation that needs to be overcome in social relations;"
I also agree with your interpretation of Smith, which is very close I
believe to the original texts. However, one should always remember the important
distinction between history of economic ideas, and history of economic
thought, as Schumpeter pointed out. Many aspects of the Smithian intellectual
heritage are not obvious if one knows only the ideas.
Many kind regards,
Martin
____________________________________
Från: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] För Dogan Goecmen
Skickat: den 30 november 2006 10:53
Till: OPE-L@SUS.CSUCHICO.EDU
Ämne: [OPE-L] Smith's socio-economic thought (a reply to Nicky)
Hi Nicky, I have changed the heading of our discussion. I hope this is okay.
DOGAN
-----------------
What is your response to what you describe? Is it
really as value neutral as
you describe or there are some normative aspects in
this, which we can use to
evaluate whether it is really rational how these
entrepreuners accumulate
their individual capitals? As a reply to this
question Adam Smith does not look
at what is necessary from an individual
entrepreneur's point of view. Rather
he prefers to look at it from general interets of
sicety's point of view:
satisfaction of the needs of people and progress.
NICKY
------------------
Dogan you are right that Adam Smith begins with the
question of what is socially desirable; however, he
rapidly concludes that the pursuit of individual
interest leads *naturalistically* to a socially
beneficial outcome so long as *social* institutions
don't interfer with the invisible hand of the market.
In conjuring up an invisible hand as a social metaphor
for the associative mechanism in a disasssociated
community Smith effectively errects a protective wall
around the concept of self-interest. Post-Smith
economists no longer weighed individual interest
against other social ends. What is rational for
individuals is also, miraculously, taken to be
rational for societies. Indeed, the so-called
value-neutrality of mainstream economic theory depends
upon the assumption.
Unfortunately, to challenge the value-neutrality of
self-interest economics from Smith to the present is
not enough because, as Jerry rightly points out,
modern neoclassical and new classical theories have
their own critiques of irrationality inbuilt. Any
theory of imperfect competition (into which my Nike
example fits perfectly), or divergence from
equilibrium solutions, is by definition a theory of
irrationality.
Imo, Marx's enduring contribution lies in his
alternative conception of the logic of capital driven
by the value form (money) and, as a result of the
existence of this *social* form, capital's unique
relation to wage labour. There is nothing 'ethical'
in this alternative conception of capitalist logic as
Marx's investigation concerns what CJ Arthur has
called the 'spring' or motive force behind capital's
reproduction (and not it's social desirability, or
otherwise). In explicating contradictions in the
development of capital's logic Marx's goes far beyond
any critique of individualist rationalism, imo. But I
will have to leave it there.
DOGAN
---------------------
Nicky, lets put what you say about Marx and Neoclassic for the time being
aside and (bearing our question in mind) concentrate on Smith, because there is
lots of clarification necessary as to how interpret Smith's work. But let me
remind you that Marx is as much concerned about the freedom of individuals
as anybody else in western social and political thought.
You seem to accept the mainstream interpretation of Smith's work as offered
by people like Milton Friedman and F. A. Hayek. But I think that this
approach fails to grasp the complexcity of Smith's teaching.
Just some methodological remainders: Smith was and is one of the greatest
historians of society and the state and as such he approached social formations
historically. The main question he poses in this connection is this: what is
more advanced and, if you like, better - feudalism or "commercial society"
(what we call capitalism today)? He definitely sees capitalism more advanced
than feudalism. He wrote the 'Wealth of Nations' long before the French
Revolution of 1789. Therefore, everything he wrote he wrote also with the aim to
highlight the advantages of capitalism compared to feudalism. He uses his
famous "invisible hand" in this context. (He uses this metaphor only three times
in his whole work: once in the Theory of Moral Sentiments to criticise land
lords, once in his philosophical essay on Astronomy and once in Wealth of
Nations.) In Wealth of Nations when he uses this metaphor the main question he
has in mind is this: who do administer social wealth in feudalism and in
capitalism? In Feudalism it is adminstered by land lords, in capitalism, by
contrast, it is administered by manufacturers. Now according to Smith Landlords make
up an idle class because they waste social wealth. They do not invest it.
Rather they consume and waste it for luxary. Manufacturers, by contrast, have
to invest it because they are permanently under the pressure of competition.
In this connection he uses the metaphor of invisible hand and says that
manufacturers are lead to contribute to the benefit of society. They do this not
consciously, this is not their aim at all, they pursue their own benefit,
namely to make profit, but because they have to invest they necessarily contribute
to the benefit of society.
Please note that he does not speak of individuals here. He speaks of
manufacturers.
Now, the other aspect you refer to in this connection is the notion of free
trade. He explicitly says that free trade is impossible not because the state
interfers with the invisible hand of the market but because manufacturers
want to defend and expand their monopolies and therefore put the state under
pressure to do so. So, Smith says that the greatest enemies of free trade are
manufacturers whose interests are always against the general interets of
society. This leads him to the famous concept of the night-watch state. If the
state is strong that would put manufacturers in a much stronger position in
relation to society than they are anyway because of their economic position.
In your email you refer to the concept of self-ineterst. Again, here I think
some clarification is in order. In his work Smith uses the concept of
self-interest in various ways. One meaning may be called what we refer to as 'life
project'. The other meaning has indeed to do with economic interest. This
distinction is very important to understand what Smith teaches us.
As to the first meaning. Indeed, in this connection, that is, in the
connection that individuals pursue their life projects, social institutions should
interfer as less as possible, because individuals know it better than anybody
else what is in their own interests. Smith employs here a different social
theory than commercial society. The foundation of social relations when he
refers to the concept of life project is mutual sympathy, support, respect and
recognition. In short, it is a social theory which envisages a society in which
everybody is everyboy's neighbour, in which everybody sees everybody else as
his/her second self.
As to the second meaning: However, as soon as economic interests come into
play there occurs what he calls corruption of moral sentiments, power
relations and mutual negation. Market society according to Smith is, then, a morally
corupt and is therefore a irrational society.
Smith works then out all sorts of contradictions in commercial society that
need to be overcome to turn it into a rational or, if you like, into an
ethical society. What are these contraditions?
First, structural problems arising from the technical and social division of
labour; Smith and other Scottish philosophers employ in this connection the
concept of alienation that needs to be overcome in social relations; second,
the dichotomy between use-value and value in exchange (paradox of values),
that occurs in commercial exchange relations; third, the contradiction of
interests between different social classes; fourth, the dichotomy that occurs in
the relationship of the state and society.
This is the political programme that Smith puts before us if we want to
establish a rational or an ethical society based on the principle of sympathy. To
understand what Smith means by ethical society one has to analyse the
mother-child relationship.
I think this indicates also as to how to assess in the case of Nike and
other companies.
I am sorry if it is too long. But this is the only way to reply to what you
say in one passage about Smith's socio-economic and political thought.
Best regards
Dogan
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