Commercial sociability, culture and virtue.

Adam Smith and István Széchenyi

Ferenc Hörcher

Hungarian Academy of Science,

Pázmány Péter Catholic University

2014

Aim of the paper: to compare views on commerce, culture and

virtue by Adam Smith (1723-1790) an early 19th century admirer of Smith,

the Count István Széchenyi (1791-1860)

Part one: Adam Smith

I. Smith’s concept of commercial sociability

The Aristotelian moment• Commercial sociability• Aristotle ↔ Hobbes ↔ Pufendorf // Smith

• „Pufendorf’s „invention” of society was a partial reversal of Hobbes’s rejection of Aristotle’s notion of man as a „zoon poolitikon” in De Cive.”

• István Hont: Jealousy of Trade (2005), 38.

The debate within the Scottish Enlightenment• Hutcheson and Smith on Pufendorf

• A Christian critic of Hobbes• A conduit (together with Mandeville) of Hobbes’s selfish system of morality

• JT, 38-9• Unlike Smith, Hutcheson attacked the content and not just the terminology of Pufendorf’s amended Hobbism.

• In Hutcheson’s eyes Pufendorf, despite his apparently Christian facade, was not a natural sociability theorist at all.

• Hont: JT, 39.

Three types of society in the TMS

• Society of fear – Hobbesian• Society of love and friendship – Hutchesonian

• In the middle: commercial society – modeled on Pufendorf’s secondary natural sociability

• It rested on the need for material self-preservation and on utilitarian reciprocity as its modus operandi.

• Hont: JT, 40

Commercial society in the TMS• Society may subsist among different men, as among different merchants, from a sense of utility, without any mutual love or affection;

• and though no man in it should owe any obligation, or be bound in gratitude to any other,

• it may still be upheld by a mercenary exchange of good offices according to an agreed valuation

• Smith: Theory of Moral Sentiments (1759), 86.

Commercial Society in the WN

• When the division of labor has been once thoroughly established

• […. Man] supplies the far greater part [of his wants] by exchanging [the] surplus part of the produce of his own labour, which is over and above his own consumption [….]

• Every man thus lives by exchanging, or becomes in some measure a merchant, and

• the society itself grows to be what is properly [called] a commercial society.

• Smith: The Wealth of Nations (1776), 37.

Smith – Hutcheson – Hobbes• When Smith rescued the notion of „commercial society” from Hutcheson’s Christian Stoic critique (who regarded it as modern Epicureanism)

• He critically overhauled the legacies of both Pufendorf and Mandeville

• But both Hutcheson and Smith – grappled with the shadow of Hobbes, too.

• Hont: JT, 51.

II. Smith on cultureThe unintended birth of language and urbanity

Birth of language and culture in Pufendorf and Hobbes

• For Pufendorf, it was need (indigentia) that caused the rise of both society and culture.

• Hobbes union (absolute minimum of consensus) ↔ concord (↔ Aristotle)

• Hobbes- claimed that it was language, the communicatice medium of sociability, that made humans so vastly superior to animals.

• Language – numeracy – sciences – high material civilization

• Hont: JT,41-42.

Hobbes on the birth of language

• Hobbes stressed that by inventing language humans created not only the arts and sciences, but also dangerous and false doctrines

• Hont: JT, 44.

Smith on the birth of language

• Two savages, who had never been taught to speak, but had been bred up remote from the societies of men, whould naturally begin to form that language by which they would endeavour to make their mutual wants intelligible to each other.

• … when two nations came to be mixed with one another, either by conquest or migration… each nation, in order to make itself intelligible to those with whom it was under necessity of conversing, would be obliged to learn the language of the other.

• Smith: Considerations concerning the first formation of languages (1761), 203, 220.

Pufendorf’s concept of culture

• Pufendorf – neediness – counterpoint – not civil society – but CULTURA VITAE, or culture, the cultivation of (handcraft).

• Four stages theory – described the various stages of human material culture.

• A natural development• Hont: JT, 46.

Smith’s conjectural history of unintended consequences

• Smith’s own proposals – based not on natural law, but on a strictly historical view of Europe’s development.

• His political economy – of an „unnatural, retrograde order”

• No state intervention – Smith’s recognition of the limits of human knowledge as applied to economy.

• Hont: JT, 104.

Smith on the birth of modern and urban Europe

• The product of a clash of civilisations – between the sophisticated commercial society of the Romans – and of the primitive ideas of the barbarous German nomads who overran it.

• Luxury captured the mind and soul of virtually the whole of medieval society

• When the legal regime of the towns gradually came to dominate Europe, a neo-Roman republican culture emerge that is best described as bourgeois republicanism.

• It was the collective self-rule of the free town-dwellers… of merchants, bankers, and artisans.

• Riding on the wealth created by their free markets, the towns bought security, order, and civility to postfeudal Europe.

• Hont: JT, 106-108.

Great proprietors and merchants – serving

unintentionally publick happiness• To gratify the most childish vanity was

the sole motive of the great proprietors• The merchanst and artificers, … acted merely from a view of their own interest

• Neither of them had either knowledge or foresight of that great revolution which the folly of the one, and the industry of the other, was gradully bringing about.

• Smith: WN, 422.

Emulation vs envy • Smith searched for an alternative to commercial jealousy

• This alternative was „national emulation”, the competitive pursuit of national economic excellence.

• It produced, Smith claimed, national happiness, welfare, and „proficiancy in the arts and sciences”

• Hont: JT, 116.

III. Smith on virtue

Utility’s connection with beauty and virtue

• (Aesthetic pleasure – leading to socially useful activities – and to the arts and sciences – which ennoble and embellish human life)

• The pleasures of wealth and greatness, when considered in this complex view, strike the imagination as something grand and beautiful and noble, of which the attainment is well worth all the toil and anxiety which we are so apt to bestow upon it.

• It is this deception which rouses and keeps in continual motion the industry of mankind. It is this which first prompted them to cultivate the ground, to build houses, to found cities and commonwealths, and to invent and improve all the sciences and arts, which ennoble and embellish human life;

• Smith: TMS183-184.

Smith compared to Rousseau and Mandeville

• Smith ↔Rousseau – who was criticising Mandeville

Commerce, culture and virtue – improvements of the world

• France and England (… -) for either of them to envy the internal happiness and prosperity of the other, the cultivation of its lands, the advancement of its manufactures, the increase of its commerce, the security and number of its ports and harbours, its proficiency in all the liberal arts and sciences, is surely beneath the dignity of two such great nations.

• These are all real improvements of the world we live in. Mankind are benefited, human nature is ennobled by them.

• In such improvements each nation ought, not only to endeavour itself to excel, but from the love of mankind, to promote, instead of obstructing the excellence of its neighbours. These are all proper objects of national emulation, not of national prejudice or envy.

• TMS, 229.

Polite emulation and moral education in the WN

• The good temper and moderation of contending factions seems to be the most essential circumstances in the public morals of a free people.

• It does not appear that the state ever assumed any inspection or direction of them.

• In the progress of refinement, when philosophy and rhetoric came into fashion, the better sort of people used to send their children to the schools of philosophers and rhetoricians, in order to be instructed in these fashionable sciences. But those schools were not supported by the public.

• …the emulation which an unrestrained competition never fails to excite, appears to have brought that talent to a very high degree of perfection.

• Smith: WN, 775-780.

Part Two: Széchenyi

I. Széchenyi on commerce

Széchenyi on Smith• Let the ashes of Smith and Young, whose eternal works – I Know – are known by the reader, greeted… the fruits of their strong mind and diligant examinations are already in our country getting ripened. And so about the division of property neither anything new, nor better can be written by me, or for that matter not even someone who is much richer in his spirit, than me, and therefore I advise the reader to turn to the works of the above mentioned.

• And we in all these are later than Smith, Young, Pitt, Baring… In imitating others we are devoid of taking any risks, as we are able to learn from the century long experiences of others.

• Count István Széchenyi: Credit (1828-9)

Széchenyi on why Hungary has no commerce

• The non-existence of our commerce is not caused by the disadvantages of our geographical location

• We should take over more from others, and especially as taste, art and the arts, science and manners are concerned

• Let us not envy anyone• How can someone be a good judge in matters of economy, commerce and credit, if he is not acquainted with foreigners, or only in an embarrrassed and shy way, and who is familiar only with our home affairs.

Széchenyi on free trade and individual responsibility

• As for commerce, there is no doubt, that much intrusion causes usually more harm, as no intrusion, and that commerce cannot be improved by orders

• It is better this way… to let the thing develop in accordance with its own nature in matters of commerce

• It depends only on us how by concord and public work we bring new life and dynamics into our commerce

Lack of inner consumption

• The majority forgets about inner consumption, which is the founding stone ofthe wealth of nations. The three quarters of the products manufactured in England is consumed by herself, and only one fourth makes its so called world trade.

Custom• The custom on products that are brought wholly abroad… should be small and stable

On the national bank• We would cause more good by a national bank, than by establishing hospitals and other such institutions…

II. Széchenyi on civic virtue (polgári erény)

Of civic virtue

• The real strength and courage of the country – depends on the people, who live in the country

• The country „will be under the yoke of foreign powers, if clear morality is corrupted and citizen virtue is not bright any more.”

• Civic virtue is the source of fulfilling duties and it is nothing more, than a love of the fatherland (anyaföld) and to the compatriots and a loyalty towards the king.

Civic virtue and nationality

• The citizen should remain in his own circle and should fulfill his duties, with good care.: but the smallest should be happy without any interruption as a result of the presents of Fate or the fruits of his own labour

• Civic or national virtue (polgári vagy nemzeti erény)

• Nationality – the human being, let him be barbarous, is sociable, and humankind is divided into nations, nationalities and yoke-fellows

• That unpronounceable sweet worry, that connects us to our fatherland

National or civic virtue• Where nationality is annulled, where inhabitants are corrupted…

• If we look at the histories of the world, is not nationality enlightened, as the sacred magic power, wich once glorified the fields of Marathon?

• The cosmopolitan – always remains alien

• It is only through virtue – that some nations rose in a sublime way

III. Széchenyi on the cultivated mind

• The real power of the nation is the quantity of knowledgeable minds

• The power of the public depends on reason

• The division of labour, as is well known by now, raises to the highest perfection the talents of the human mind

Public intelligence and spiritual and bodily perfection• The intelligence of the public – general reasonableness – is the sign, by which the wise can evaluate nations.

• The landlord has the major influence on the spiritual and bodily perfection (csinosodás) of his serves.

• The paternal care of the government, the close atttention paid to the laws, and the trust towards her loyal serves makes the nation happy and strong

The system of Széchenyi• On that - credit in the more general sense

• On that - civic virtue• On that - nationality• On that - economic development (középesülés)

• On the lowest level – the human mind (emberfő)