A Vindication of Commercial Society

In the Wealth of Nations Adam Smith outlines a commercial society:

When the division of labour has been once thoroughly established, it is but a very small part of a man’s wants which the produce of his own labour can supply. He supplies the far greater part of them by exchanging… the produce of his own labour… for such parts of the produce of other men’s labour as he has occasion for. Every man thus lives by exchanging, or becomes in some measure a merchant, and the society itself grows to be what is properly a commercial society.

The last sentence of the just quoted passage forms the leitmotif of this immensely accomplished and insightful book by Christopher Berry, Professor Emeritus in Political Theory at Glasgow University. The book’s cover is graced by a drawing of the inner court of that university where Smith, in a letter of thanks upon his installation as its rector in 1787, reports he had spent “by far the most useful and therefore as by far the happiest and most honourable period” of his life, both as student and subsequently successor to his one-time teacher there, Francis Hutcheson, in the Chair of Moral Philosophy.

Hutcheson, an Ulster-born Presbyterian Scot, had, in turn, also been educated there before moving to Dublin to open and run an academy. It was there Hutcheson acquired international fame that led to his appointment at Glasgow by writing and publishing in 1725 a celebrated tract on the origin of our moral ideas. This tract had been heavily influenced by works in ethics with which he first became acquainted in Dublin written by John Locke’s former tutee, the third Earl of Shaftesbury to whom Hutcheson dedicated the first edition of his own tract. Shaftesbury, in a letter to the Swiss theologian Jean Le Clerc in March 1705, made the following highly prescient observation about that great efflorescence of ideas in Europe in the eighteenth century, subsequently known as the Enlightenment, in which Adam Smith’s Scotland was to play such a prominent part:

There is a mighty light which spreads itself over the world especially in those two free nations of England and Holland… and if Heaven sends us soon a peace… it is impossible but letters and knowledge must advance in greater proportion than ever.

Shaftesbury made this remark early on during the so-called War of Spanish Succession which raged in Europe for more than a decade until 1714. It was during it that, to forestall its becoming allied with and used as springboard for invasion by its traditional enemy, France, England was to engineer political union with Scotland, in return for which it provided its economically backward northern neighbour with an enormous economic stimulus. Within a few decades, this previous economic and cultural backwater became the epitome of a commercial society whose idea was to fascinate and absorb the intellectual energies of that small country’s band of literati whose most illustrious member was Adam Smith.

Berry’s book is about how these Scottish literati conceptualised and reacted to this novel form of society their country was fast turning into during the half century between publication of David Hume’s Treatise of Human Nature in 1739-40 and the sixth edition of Adam Smith’s Theory of Moral Sentiments in 1790. It would be hard to exaggerate the importance of their achievement. As was noted by Arthur Herman in his 2001 book How the Scots Invented the Modern World:

The Scots created the basic ideals of modernity… When we gaze out on the contemporary world shaped by technology, capitalism, and modern democracy… we are in effect viewing the world through the same lens as the Scots did… In 1700 Scotland was Europe’s poorest independent country… [By 1800] this small, underpopulated, and culturally backward nation had] rose to become the driving wheel of modern progress… [I]f you want a monument to the Scots, look around you.

As Berry observes, the Enlightenment was not just a collection of forward-looking intellectuals and their ideas. It was also a set of formal and informal institutions through which the intellectuals propagated these ideas and drew mutual support and encouragement.

In his opening chapter, Berry explains just how tight-knit this set of institutions was in Scotland’s case. At their core were its universities whose curricula became modernised more than a century before England’s did. Closely connected with them was a large network of clubs and debating societies which brought together academics, merchants, lawyers and clergymen in a highly fruitful symbiosis. As Berry remarks ‘these various societies were an important part of the institutional fabric and played a leading role within Scotland… By forming a point of convergence for universities, the law, the church and the ‘improving’ gentry… the idea of a commercial society took on an institutional form… thinking about “commercial society” was woven into the fabric; it was not some detached academic exercise.’

What, then, did Scotland’s eighteenth century thinkers observe about the new form of society that they were witnessing springing up around them?

In the second chapter of his book, Berry offers a highly useful account of their understanding of this idea from which the following vignettes are taken:

One of the ideas for which the Scots are best known is their notion of the four stages (hunting, herding, farming, commerce)… To understand their own commercial era meant for the Scots placing it in a narrative that began with the destruction of the Roman Empire, but in which the pivotal ‘event’ is the collapse of feudalism… [T]he history… portrayed in the four stages rests on a particular model of ‘natural’ development… from concrete to abstract, from simple to complex, from rude to cultivated or civilised…. A commercial society does indeed have a distinctive property regime but that is only one aspect of the complex inter-related whole which defines that type of society.

The remaining chapters of Berry’s book explore various aspects that comprised a commercial society in the eyes of Scotland’s literati. Of them, the much greater opulence and freedom it confers on all its members, relative to other social formations, constitute its two chief distinguishing features as well as its most salient advantages over them. As Berry puts it:

Although in the Scots’ writings there is no explicit definition or even delineation of what constitutes ‘civilisation’ (a new term), nevertheless there was a definitive difference between Athens and Edinburgh (the so-called ‘Athens of the North’). The latter was civilised and free. The Scots are clear that their own (and similar) society is civilised… Contrary to Stoic and republican ‘frugality’ or Christian asceticism… Smith [along with his fellow Scottish literati] is firmly repudiating any notion that poverty is ennobling or redemptive… Smith’s and others’ repudiation of the nobility of poverty is a key factor in the vindication of a commercial society.

Underpinning commercial societies, in the eyes of the Scottish literati, is the rule of law as the one institution on which depends the mutual trust between strangers involved in regular trade, contract, credit, and paper money. As Berry explains with characteristic cogency:

The argument relies on a series of [posited] causal connections: stability from a framework of law causes security and security is a causal precondition for the development of a market and extension of contracts and exchange. This goes to the heart of the idea of a commercial society… What the authority of law provides is security of property for all… Perhaps the most decisive development [in the establishment of the rule of law] was the separation and independency of the judiciary for it is that which ensures the impartiality of administration [of justice] that imparts security to all.

Yet, a problem remains as to how such rule becomes established and what maintains it. There is a problem here, of which the Scottish literati were acutely aware and did their best to address. Berry explains the problem so: ‘In a commercial society we live predominantly among “an assembly of strangers”… Since the bulk of our dealings are impersonal then they must be conducted on the basis of adhering to the complementary impersonal (abstract) rules of justice… [Yet] the Scots are aware that this society can be construed to appear to rely to a reprehensible extent on “self” or “private”, rather than, “social” or “public”, interest.’

Self-love is the animating force behind commerce, yet the viability of commerce presupposes a degree of self-restraint on the part of those who engage in it, out of consideration for others. From whence arises the motivation needed to energise such self-restraint? Their answer was that such consideration arose from individual moral conscience variously understood, with Smith having characteristically described its restraining power the most graphically as well as illuminatingly. He writes of it in one of the most memorable passages in his Theory of Moral Sentiments:

When our passive feelings are almost always so sordid and so selfish, how comes it that our active principles should often be so generous and so noble?… It is not the soft power of humanity, it is not that feeble spark of benevolence… that is thus capable of counteracting the strongest impulses of self-love. It is a stronger power, a more forcible motive which exerts itself upon such occasions. It is reason, principle, conscience, the inhabitant of the breast, the man within, the great judge and arbiter of our conduct…

While the rule of law could thus be supposed capable of prevailing within commercial society through the moral probity induced in members by the strictures of their consciences, the Scottish literati remained exercised by the notion that commerce had a morally deleterious effect on those whose livelihoods were gained by means of it, which increasingly meant everyone in a commercial society. The source of such concern lay in the ancient republican notion that true freedom and virtue demanded a form of active citizenship governed by a concern for the public good for which a narrow preoccupation with mercenary self-interest characteristic of commerce simply had no place. Berry terms this concern ‘the luxury critique’ of commercial society and characterises it so:

A free state depended on virtuous (free) men devoted to the public good for which they were willing to fight (and die)… A society where wealth is valued will produce a generation… [that]will devote itself to private ends and… be unwilling to act foe the public good, where crucially central to such action is a willingness to fight… Once poisoned by luxury they invest life itself with value and become afraid of death, with the consequence that the society will be militarily weak – a nation of cowards… will easily succumb.

Among the Scots literati, Adam Ferguson and Lord Kames who were the most exercised by this issue. Hume and Smith by contrast tended to consider such concern about the morally corrupting effects of luxury misplaced, being redolent of nostalgia for a bygone era irretrievably passed whose claim in any case to greater valour than modernity was in their view highly exaggerated. Berry is particularly instructive in detailing the argumentative stratagems through which Hume and Smith sought to defuse and repudiate the luxury critique of commerce.

Thus, in the case of Hume, Berry notes: ‘The Spartan regime, where everyone has a “passion for the public good”, is contrary to “the natural bent of the mind”, and ‘to govern men along Spartan lines would require a “miraculous transformation of mankind”.’ Similarly, for Hume: ‘The supposed causal link between luxury and military weakness fails the test of constant conjunction, as manifest by the cases of France and England, that is, the two most powerful because the two most polished and commercial societies’. Likewise: ‘For Smith, militias are outmoded… in an “opulent and civilised nation” a professional army is the means to preserve civilisation against invasion from a “poor and barbarous nation”… In explicit repudiation of the position of “men of republican principles”.., he claims [a professional] army’ can… ‘be favourable to liberty’… in those circumstances where the chief officers… are drawn from the “principal nobility and gentry”.’

Berry is rightly not oblivious to the morally detrimental effects that Smith identified commercial society having on its members. He notes that: ‘In Book 5 of the Wealth of Nations he [Smith] observes… that the dexterity of the specialised operative (read pin-maker) is bought at the cost of his “intellectual, social and martial virtues”.’ Yet, for all that, contrary to many recent expositors of Smith such as Denis Rasmussen and Ryan Hanley, Berry contends that:

Smith is… not to be saddled with the possession of some profound disquiet about the soul of modern man… Smith’s purpose in identifying these threats to these virtues, these deficiencies or ailments of commercial society, is programmatic…. [T]he point is to identify where government action, and the public purse, is called for in order to remedy the deficiencies…

The remedy for torpid intellectual virtues is… [publicly-funded] education… [T]he shortfall in the “pin-maker’s” social virtues… [can be remedied by] use of the tax system to reduce the number of alehouses… [plus state support of] “public diversions”, such as drama, music, dancing and the like… to lift the “melancholy and gloomy humour” that Smith associates with the “disagreeably rigorous and unsocial character “of [austere religious] sects [to which he considers are especially prone migrants to large cities from rural backgrounds]… When it comes to addressing the erosion of the martial virtues… [Smith] refers to the military exercises that the Greeks and Romans made the citizens perform… He does not say the exercises should be compulsory but… recurrence of the phrase ‘premiums and badges of distinction’ with respect both to parish schools and the Greek and Roman republics suggests… [Smith favored] a government-backed incentive structure to encourage participation in activities that would help the decline of the martial spirit.

What is being suggested here is that whatever morally subversive effects commerce might have upon populaces whose ways of life had become deeply informed by it can all be adequately addressed by judicious forms of state intervention be they public subsidy of schooling, of the arts, or of sport. Berry ably sums up the resultant idea of a commercial society when he observes that:

What the Scots’ idea seems to resemble is the outlines of a “liberal” picture of society… The complex interlocking whole is not some perfect functioning system… [T]he Scots are well-aware of commercial society’s imperfections just as they remain cautiously optimistic that these will be eroded by progress.

Whether we can share their optimism remains an open question. Even should we not be able to, we can nonetheless still share their common confidence that this form of societal organisation is superior to all others. Berry is to be commended for having explained so clearly and carefully why members of the Scottish Enlightenment shared such confidence and why we might do so too.