Adam Smith On What It Means To Flourish

It is difficult to imagine two things more different, on their face, than public policy and political philosophy. One is concrete; the other abstract. One provides solutions; the other asks questions. One responds to the challenges of the moment; the other to challenges that have been with us from the earliest times.

Yet for all these differences, the divorce of political philosophy from public policy would be fatal to each. The policymaker who limits his vision to what can be done and is deaf to questions about what ought to be done seems as dangerous as the philosopher who focuses on the ideal and ignores the real conditions of human beings. Bringing the two enterprises together thus seems necessary for the success of each individually. It is especially necessary when the substantive issue at stake concerns the relationship of human flourishing to economic liberty—a relationship that was particularly well understood by Adam Smith, one of the modern world’s most careful and insightful students of both public policy and political philosophy.

Adam Smith The Wealth of Nations Economics
Adam Smith
Adam Smith

The divorce of political philosophy from public policy would be fatal to each.Adam Smith is of course today famous for his defense of economic liberty and thus as a founding father of capitalism. In his book The Wealth of Nations, Smith laid out a comprehensive defense of what he called “commercial society,” analyzing at length and in detail the policies of a market society and their several advantages over more restrictive policies associated with alternative forms of economic order.

The book is today remembered largely for its images and metaphors: the pin factory that shows the remarkable advantages of divided, specialized labor and the invisible hand that generates wealth and promotes its distribution. Yet those who have read the whole book know that its primary focus is public policy—evident in the simple fact that  The Wealth of Nations invokes the invisible hand only once, but cites and studies no less than 266 discrete English statutes and Scottish parliamentary acts.

Smith’s credentials as both a champion of economic liberty and a policy wonk are thus solid. But his interests hardly end here and in fact extend to the concept of human flourishing. In what follows, I argue that Smith’s credentials on this philosophical front are every bit as solid as those on the practical economic front. In particular I argue that Smith thought long and hard about the concept of human flourishing; and, most importantly, that the vision of human flourishing he developed is itself the grounds for his defense of economic liberty.

If this is right, it has implications for how we understand Smith and for how we understand the relationship of philosophy to policy. On the first front, the main implication of the view I want to defend is that Smith’s defense of the superiority of market orders rests not on concerns with simple utility maximization, but rather on the belief that markets are indispensable to human flourishing.

Put in this volume’s terms, Smith’s defense of the economic liberty fundamental to capitalism is founded on the belief that economic liberty is not an end in itself, but a means to the greater end of promoting the flourishing of both individuals and societies. And on the latter front, the main claim I want to defend is that Smith, insofar as he brings together the concerns of both policy and philosophy, remains a useful model for those of today’s legislators seeking to transcend mere ideology and instead articulate a vision for an enlightened public policy informed by political philosophy.

Adam Smith – Economic Flourishing

What follows focuses on three discrete claims that Smith advances in three separate passages. Each passage focuses on the concept of human flourishing, and analyzed and read in context, they illuminate not only Smith’s understanding of human flourishing, but also the foundations of his defense of economic liberty. Yet the three passages, while all focused on human flourishing, treat different sides of the concept, with one focused on what we might call economic flourishing, the second on political flourishing, and the third on moral flourishing.

There was a claim that higher wages for laborers would make them dissatisfied with previous conditions.We begin with the first of these: economic flourishing. Smith uses the term “flourishing” in a variety of places in The Wealth of Nations, often in the context of describing the flourishing condition of a particular trade or particular manufacture in a particular country. So far as I know, only once in the text does he invoke the explicit concept of flourishing in its traditional, philosophical sense of referring to the healthy state of a society or individual. But it is a very important reference, one that well deserves the attention of both Smith specialists and students of capitalism more generally.

The reference comes in the midst of Smith’s chapter on the wages of labor in the first book of The Wealth of Nations. Its specific context is Smith’s intervention in a current debate over the relative desirability of “improvement in the circumstances of the lower ranks of the people.” Not everyone welcomed the prospect of improvement in the condition of the poor. Smith was intimately familiar with the counterargument that higher wages for laborers would translate into a new taste for luxury, leading to dissatisfaction with previous conditions, as well as the claim that high wages would tend to sap industriousness and incentivize laziness. But Smith rejected such claims on the grounds of human flourishing:

Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconvenience to the society? The answer seems at first sight to be abundantly plain. Servants, laborers and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed, and lodged.

This is a striking and important passage for several reasons. Some of these concern what they reveal about Smith, while others concern their implications for how best to understand market orders and their benefits today.

On the former front, the passage especially clarifies the degree to which Smith cannot be reduced to a caricature view that defines the good society as that in which the most talented few enjoy the maximum possible opportunities for achievement and self-advancement. Smith of course values the utility of the free pursuit of self-interest, but freedom to pursue self-interest alone neither defines a flourishing society nor justifies a market order. As made clear here, what defines the flourishing society is not the condition of the few but the condition of the majority; indeed, only when the “far

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