Free Trade and Decadence, Old and New

Back in the heady days of 18th century Scotland when Adam Smith argued for free markets, the best minds were worried about luxury. Britain was an epicenter of globalization, and as exotic goods from Asia and elsewhere flowed in, the superfluities of life changed expectations for happiness. Water out of a wooden cup no longer satisfied when imported coffee in porcelain was available at a newfound café around the corner. British artisans and manufacturers competed to provide greater refinements, and the race for life’s unnecessary trappings was on. This made luxury a thorny issue.

Growing productivity and wealth were good things, most of Britain’s literati recognized, but they also produced—in Smith’s words—“lovers of toys,” a new class in Britain who “ruin themselves by laying out money on trinkets of frivolous utility.” Globalization and rising, if uneven, standards of living were creating new possibilities for individual fulfillment, which of course also meant paving the way for individualism. As Britain’s leading public intellectuals made the case for a growing commercial society, they also wrestled with what might undermine such a society.

Their debates foreshadow today’s intramural sparring within American conservatism. In an effort to reckon with a post-2016 America, conservative nationalists have been arguing that an over-reliance on free markets and individualism is at the heart of American decline. Globalization has enriched an elite class, elevated expectations about what the good life requires, and left a stagnating middle class without access to that good life.

Themes of Decadence and Decline

Conservative nationalists often frame their arguments in economic terms, but their unifying impulse is moral more than economic. Whether it’s the common-good conservatives who believe that our reliance on individual rights was flawed from America’s founding, or the traditionalists who argue we need a more robust understanding of America as a nation, or the pro-worker conservatives who want to revisit the glories of industrial policy, nationalists are united in their view that America is rotting from the top down. The elites who control the commanding heights of universities, media, and capitalism have left the rest of us wandering across a barren landscape of individualism. This may express itself economically, but it is fundamentally a moral loss—a substitution of the empty aims of individual fulfillment for the meaningful attachments of family, community, and country.

Today’s nationalists often write as if we have crossed a threshold of decline that is new and unprecedented, but as 18th century Britain shows, similar debates have happened not only multiple times within the 20th century conservative movement but much earlier than that. David Hume, a friend and mentor to Smith, observed that an expanded taste for superfluity had triggered a wave of productivity that benefited Britain, a claim well-suited to the free-market worldview that today’s nationalists criticize.

Instead of clannish conflict and sloth among the 18th century version of what we now call the “working class,” Hume saw a new realm of innovation, creativity, and productivity. People wanted more than wooden tableware and weight-driven wall clocks, and the rush to create new products channeled passions away from tribal preoccupations into market-oriented obsessions. Instead of feuding with each other over who stole whose chickens, farmers and shopkeepers were competing to produce things people wanted even if they didn’t need them. He also saw that luxury produced a new class of vices, as satisfying new desires easily became an end to itself and ruined souls.

For this reason, our forefathers of free-market economics were also keenly interested in the subject of corruption. As wages rise and access to new and enjoyable products expands, we tend to measure happiness by gratification. This troubled the other Adam of the Scottish Enlightenment. Adam Ferguson, who was born the same year as Adam Smith (1723), recognized the benefits of globalization and the commercial society of 18th century Britain, but he was also worried that the incentives of market-based activity would corrupt the civic virtue on which British society depended.

Ferguson understood the benefits of a vibrant commercial society, but he also feared it would corrode the ties of civil society as people lost sight of their communities for their own individual gain. Materialism and corruption are perennial bedfellows. Ferguson worried more than Hume and Smith about the deleterious effects of commerce on society, but they all agreed that the superfluities of modern commercial life created new social complications.

Ferguson thought modern commercial life was inevitable and created many good things. Like Hume, he recognized that for all of the vices it encourages, it is both a cause and effect of a growing and innovating economy marked by “the progress which the mechanical arts have made.” Nevertheless, in An Essay on the History of Civil Society, he places his thoughts on luxury in a chapter entitled “Of Corruption and Political Slavery.” He regarded economic progress and the concomitant taste for finer things as a threat to the moral order. People’s energies turn away from their communities and toward the objects of their desires.

Because we are at our best when we defend the communities in which we live, which in turn serves the larger nation, commercialism erodes civic health. Ferguson believed in the need for a robust public square in which people could serve through political engagement, charitable acts, and most importantly, military service. A Highlander, he was the only major figure of the Scottish Enlightenment to speak Gaelic. Home, hearth, and tribe were, to him, fundamental building blocks of a civil society, which should claim our primary allegiance. The forfeiture of civic virtue in favor of commercialism creates a “remissness of spirit, the weakness of soul, [and] that state of national debility” that leads to political slavery.

Luxury and the Costs of Progress

Hume’s more sanguine views of luxury stem from his view of progress. In a 1752 essay, “Of Luxury,” he observes that social improvement occurs not only when a society produces great poets and philosophers, but also when it “abounds with skilful [sic] weavers and ship-carpenters.” As economies grow, they create appetites for elevated and better things. Happiness, which consists of “action, pleasure, and indolence,” has both moral and economic roots. The essay was re-titled “Of Refinement in the Arts” in the 1760 edition of Hume’s essays to more accurately capture its focus on the net benefit to British society of domestic creation (“arts,” in the vernacular of the day, encompassed mechanical inventions and products), innovation, and production amidst global trade. Advances in the arts and sciences make work and leisure more satisfying and create new opportunities “to cultivate the pleasures of the mind as well as those of the body.”

Hume is describing a culture of growing sophistication in the generation of new knowledge and technical improvements. It is an urbanizing culture. People “flock into cities; love to receive and communicate knowledge; to show their wit or their breeding; their taste in conversation or living, in clothes or furniture… Particular clubs and societies are everywhere formed.” We may no longer speak of “breeding,” but the status signals of urban elites are not much different today than then. The urban-rural divide decried by today’s populists is nothing new.

Adam Smith worried with Ferguson that commercial life invited the erosion of virtue, but he was more concerned with the corrupting forces of institutional limitations on natural liberty, such as poor laws, monopolies, and entail practices. He also worried about tribalism in politics, as did Hume. These types of corruption can be found in the cronyism, factionalism, and favoritism that reward insiders while depriving everyone else from benefitting from the free exercise of their skills and trades in commercial exchange. Instead of bettering themselves through dynamism and industry, the winners corrupt themselves through ingratiation and favor-seeking.

If workers are not paid enough by their companies or denigrated by cultural elites, redistribution or retribution are less worthwhile than thinking anew about how to rearrange the relationships between the groups and improve the opportunities for self-fulfillment at the individual and communal level.

Like Hume, Smith was as interested in the virtues of a modern economy such as vigilance, reliability, firmness, and temperance, as those of the classical world such as valor, justice, and sacrifice. Just as classical virtues such as displaying courage and applying justice esteem us in the eyes of others, modern virtues such as “industry, prudence, and circumspection” reward us with success in business. Both sets of virtues are necessary for a successful society, and without flourishing commerce, a society will not enjoy the latter.

Focusing on productivity and its virtues is all fine and good for Ferguson, but he identifies another reason to be wary of a society that is preoccupied with ever-better commodities and services: inequality, and not just of the economic variety. He writes:

If the disparities of rank and fortune which are necessary to the pursuit or enjoyment of luxury, introduce false grounds of precedency and estimation; if, on the mere considerations of being rich or poor, one order of men are, in their own apprehension, elevated, another debased… the whole mass is corrupted, and the manners of a society changed for the worse, in proportion as its members cease to act on principles of equality, independence, or freedom.

In other words, inequality is more than just a difference in wealth, it is also a gulf in status. The higher ranks, which we now call “the elites,” look down on the lower ones, and merit is abandoned for the vanity of social status. “We judge of entire nations by the productions of a few mechanical arts, and think we are talking of men, while we are boasting of their estates, their dress, and their palaces,” Ferguson writes. He notes that we assign terms of value, such as “great” or “noble” to expressions of social status rather than character and thereby transfer “the idea of perfection from the character to the equipage,” which is itself “a mere pageant, adorned at a great expense, by the labours of many workmen.”

The Liberal Reward for Labour

Echoes of these 18th century concerns reverberate in today’s intramural conservative debates. There were winners and losers in Britain’s globalizing commercial empire, just as there are in America today. Like many proponents of growth and capitalism today, Hume believed improvements in the living conditions of ordinary Britons were intertwined with cosmopolitanism enough to justify the excesses of the latter, while Ferguson anticipates the conservative nationalists’ moral critique of market activity. But they also agreed on important points, which might help shine a light on a few paths forward among today’s feuding conservatives.  

First of all, despite their differences, Hume, Smith, and Ferguson shared the opinion that local attachments are key to moral and economic progress. The habits and skills needed to sustain a flourishing commercial society are fashioned at home, on the ground, in community. As sanguine as Hume was about the humanizing effects of global commerce, he was a harsh critic of abstract ideology and the idea that people’s behavior is positively affected by distant notions of fairness or justice.

He surely would have criticized today’s conservative nationalists’ quest to find an inspired definition of national greatness. If you want people to love their country, Hume would say, let them live in communities that allow them to fulfill their potential, enjoy their friends, and to have a variety of options for self-improvement and enjoyment. It would not surprise Hume, Smith, or Ferguson that ordinary working Americans are restive today, since they are deprived, community after community, of these goods, while it seems that elites disproportionately enjoy them. Trying to construct a rich and meaningful notion of the nation without addressing these more local concerns is an empty pursuit.

Second, they shared a conviction that all work is valuable. Unlike other Enlightenment thinkers outside Britain, they regarded merchants, shopkeepers, and artisans as essential elements of social stability and progress. Against a long-held view that wealth depended on keeping the working-class poor, they argued that all jobs should benefit from the same incentives for gain enjoyed by the upper class. To complain about “the liberal reward for labour,” Smith wrote, “is to lament over the necessary effect and cause of the greatest prosperity.” The dignity of work is a theme that unites overlapping strands of nationalists and free-marketeers. They may currently disagree about policies that support it, but that should not stop them from thinking together about how to make work more rewarding in more occupations. This is not merely a debate about wage levels but about how to realize the full rewards of various skills and abilities.

Third, the 18th century writers all believed in the primacy of agency. Whatever socioeconomic winds blow in our faces, we are all ultimately the happiest when we work to improve ourselves and the circumstances in our control. This is not libertarian individualism, since Hume, Smith, and Ferguson believed industrious workers also need strong associational life—communities, professional associations, families, and friends. But they did regard themselves as liberating working-class people from victim status. They would have resisted the victimology that frequently creeps into conservative nationalism. If workers are not paid enough by their companies or denigrated by cultural elites, redistribution or retribution are less worthwhile than thinking anew about how to rearrange the relationships between the groups and improve the opportunities for self-fulfillment at the individual and communal level. Keeping agency a priority is key to any progress among center-right thinkers. Abandoning it is the territory of the left.

History may rhyme more than it repeats, as the saying goes, and if today’s conservatives can just rhyme a bit more with the insights of 18th century Scotland, they may weed out the errors and stitch together a more robust, compelling, and inclusive center-right moral and economic agenda.