Extra: Smith's egalitarianism and what follows
In her interview with Juliette Sellgren for The Great Antidote Podcast, Sandra Peart discusses James Buchanan’s approach to economics and how it influenced the “Virginia School” of economics. Peart is discussing her book with David Levy, Towards an Economics of Natural Equals: A Documentary History of the Early Virginia School. Buchanan, says Peart, believed
there are two ways of, as he puts it, two methodologically distinct ways of doing economics. And he says in the first one, the economist sets up a goal for the economy and for the actors within the economy. And that goal, key points to efficiency as one possible thing, one goal that could be presupposed. And—here's what's important—you then impose that on the model. […] (17:00)[The second way is to] instead…let the people within the economy, private individuals, engage as [Buchanan] puts it in the continuing search for institutional arrangements upon which they can reach substantial consensus or agreement. So that's a very different way of doing economics. And really the book is about how the Virginia School, led by Buchanan in this respect, tried to have this second way of doing economics as an alternative. (18:05)
Peart and Sellgren explore how, as Buchanan put it, he became more influenced by Adam Smith over time. In particular, Peart draws on the famous example of the street porter and the philosopher (Wealth of Nations Book 1, Chapter 2, paragraph 4).
[Smith] says that it's the vanity of the philosopher to presume that he's superior to the street porter, that he's a different type of person from the street porter. It's really, he says, only the division of labor that led to that greatly different outcome. So that's a very strong statement of natural equality. (28:48)
This egalitarianism helps inform the school of public choice, which starts with the assumption that people are people, whether they act in the market or government. This can explain why government actors do not always act with complete altruism, as well as why people use politics, no matter how imperfect.
Peart goes on to talk about the importance of the division of labour in how people develop personally, as well as how it enables and encourages innovation that further encourages growth. This leads Peart to argue that Smith is certain of the value of the division of labour:
This isn't to say that Smith doesn't see that doing a menial task as a result of the division of labor can't be stultifying. So he does allow that. It can be a really difficult existence if all you do is straighten a pin all day. He's not talking about the stultification in that context, but you could imagine him saying it. But overall, the division of labor is, for him, a tremendously important thing and not one that worries him. (40:17)
As Peart argues, Smith believes the benefits of the division of labour are worth the cost. But the cost is high. In his arguments about the proper roles for government in Wealth of Nations, Smith argues that the bad effects of the division of labour are so severe that they justify one of the few areas of government action.
The torpor of his mind renders him, not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. Of the great and extensive interests of his country he is altogether incapable of judging; and unless very particular pains have been taken to render him otherwise, he is equally incapable of defending his country in war. The uniformity of his stationary life naturally corrupts the courage of his mind, and makes him regard with abhorrence the irregular, uncertain, and adventurous life of a soldier. It corrupts even the activity of his body, and renders him incapable of exerting his strength with vigour and perseverance, in any other employment than that to which he has been bred. His dexterity at his own particular trade seems, in this manner, to be acquired at the expence of his intellectual, social, and martial virtues. But in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it. (WN Book 5, Chapter 1, Part 3, Article 2d, paragraph 50)
Among Smith’s worries are that the stultifying effects of too fine a division of labour will make someone incapable of acting as a good citizen, especially as their specialization forms a smaller and smaller portion of the concerns of the society. But he also worries about an economic cost.
In Book 1 of Wealth of Nations, Smith uses the illustration of “the boy who loves to play” to explain why the division of labour helps innovation but in Book 5 he worries that if the division of labour is too fine, invention will suffer. Opportunities for innovation are more obvious for someone with a narrowed focus, but the innovations themselves require a mental liveliness that Smith worries diminishes as labourers perform fewer tasks. When arguing for the importance of education, Smith says that in less developed societies where people are less subject to the division of labour,
the varied occupations of every man oblige every man to exert his capacity, and to invent expedients for removing difficulties which are continually occurring. Invention is kept alive, and the mind is not suffered to fall into that drowsy stupidity, which, in a civilized society, seems to benumb the understanding of almost all the inferior ranks of people." (WN Book 5, Chapter 1, Part 3, Article 2d, paragraph 51)
It’s fun when Sellgren comes at an issue from multiple angles through different guests. In her interview months later with Jacob T. Levy, Sellgren and Levy discuss how the division of labor leads to social inequality despite the moral egalitarianism on which the process is built and through no part of the intention of individual actors. In The Theory of Moral Sentiments, Smith says of the treatment of someone because of their position in social hierarchies:
This disposition to admire, and almost to worship, the rich and the powerful, and to despise or, at least, to neglect persons of poor and mean condition, though necessary both to establish and to maintain the distinction of ranks and the order of society, is, at the same time, the great and most universal cause of the corruption of our moral sentiments. (TMS Part 1, Section 3, Chapter 3, paragraph 1)
Disagreements between these conversations encourage us to ask more questions about what Smith was writing and what we draw from it.
We might look at Smith’s defence of equality and how it influenced public choice economics, and ask: how might Smith’s worries about the downsides of the division of labour affect economic thought and methodology?
On the flipside: are the upsides of the division of labour economic, while the downsides are moral and political? How do these moral and political concerns interact with one another? Does Smith deal with them well?
All of our content is equally worthy. But you could start here:
Jacob Levy on Smith, Hayek, and Social Justice on The Great Antidote
Division of Labor Part 3: The System of Exchange by Michael Munger
What would Adam Smith think about “vocations?” by Christy Lynn Horpedahl and Janet Bufton
Adam Smith and the Costs of the Division of Labor by Alex Aragona
Could Too Much Division of Labor Be Bad? By Amy Willis
Division of Labor Part 3: The System of Exchange by Michael Munger
What would Adam Smith think about “vocations?” by Christy Lynn Horpedahl and Janet Bufton
Adam Smith and the Costs of the Division of Labor by Alex Aragona
Could Too Much Division of Labor Be Bad? By Amy Willis