Chomsky On Adam Smith
"What we would call capitalism he despised"
By Noam Chomsky
Excerpted from Class Warfare - 1995
May 04, 2009 "Information Clearing House" -- David Barsamian:
One of the heroes of the current right-wing revival... is Adam Smith.
You've done some pretty impressive research on Smith that has
excavated... a lot of information that's not coming out. You've often
quoted him describing the "vile maxim of the masters of mankind: all
for ourselves and nothing for other people."
Noam Chomsky: I didn't do any research at all on Smith. I just read
him. There's no research. Just read it. He's pre-capitalist, a figure
of the Enlightenment. What we would call capitalism he despised. People
read snippets of Adam Smith, the few phrases they teach in school.
Everybody reads the first paragraph of The Wealth of Nations where he
talks about how wonderful the division of labor is. But not many people
get to the point hundreds of pages later, where he says that division
of labor will destroy human beings and turn people into creatures as
stupid and ignorant as it is possible for a human being to be. And
therefore in any civilized society the government is going to have to
take some measures to prevent division of labor from proceeding to its
limits.
He did give an argument for markets, but the argument was that under
conditions of perfect liberty, markets will lead to perfect equality.
That's the argument for them, because he thought that equality of
condition (not just opportunity) is what you should be aiming at. It
goes on and on. He gave a devastating critique of what we would call
North-South policies. He was talking about England and India. He
bitterly condemned the British experiments they were carrying out which
were devastating India.
He also made remarks which ought to be truisms about the way states
work. He pointed out that its totally senseless to talk about a nation
and what we would nowadays call "national interests." He simply
observed in passing, because it's so obvious, that in England, which is
what he's discussing -- and it was the most democratic society of the
day -- the principal architects of policy are the "merchants and
manufacturers," and they make certain that their own interests are, in
his words, "most peculiarly attended to," no matter what the effect on
others, including the people of England who, he argued, suffered from
their policies. He didn't have the data to prove it at the time, but he
was probably right.
This truism was, a century later, called class analysis, but you don't
have to go to Marx to find it. It's very explicit in Adam Smith. It's
so obvious that any ten-year-old can see it. So he didn't make a big
point of it. He just mentioned it. But that's correct. If you read
through his work, he's intelligent. He's a person who was from the
Enlightenment. His driving motives were the assumption that people were
guided by sympathy and feelings of solidarity and the need for control
of their own work, much like other Enlightenment and early Romantic
thinkers. He's part of that period, the Scottish Enlightenment.
The version of him that's given today is just ridiculous. But I didn't
have to any research to find this out. All you have to do is read. If
you're literate, you'll find it out. I did do a little research in the
way it's treated, and that's interesting. For example, the University
of Chicago, the great bastion of free market economics, etc., etc.,
published a bicentennial edition of the hero, a scholarly edition with
all the footnotes and the introduction by a Nobel Prize winner, George
Stigler, a huge index, a real scholarly edition. That's the one I used.
It's the best edition. The scholarly framework was very interesting,
including Stigler's introduction. It's likely he never opened The
Wealth of Nations. Just about everything he said about the book was
completely false. I went through a bunch of examples in writing about
it, in Year 501 and elsewhere.
But even more interesting in some ways was the index. Adam Smith is
very well known for his advocacy of division of labor. Take a look at
"division of labor" in the index and there are lots and lots of things
listed. But there's one missing, namely his denunciation of division of
labor, the one I just cited. That's somehow missing from the index. It
goes on like this. I wouldn't call this research because it's ten
minutes' work, but if you look at the scholarship, then it's
interesting.
I want to be clear about this. There is good Smith scholarship. If you
look at the serious Smith scholarship, nothing I'm saying is any
surprise to anyone. How could it be? You open the book and you read it
and it's staring you right in the face. On the other hand if you look
at the myth of Adam Smith, which is the only one we get, the
discrepancy between that and the reality is enormous.
This is true of classical liberalism in general. The founders of
classical liberalism, people like Adam Smith and Wilhelm von Humboldt,
who is one of the great exponents of classical liberalism, and who
inspired John Stuart Mill -- they were what we would call libertarian
socialists, at least that ïs the way I read them. For example,
Humboldt, like Smith, says, Consider a craftsman who builds some
beautiful thing.
Humboldt says if he does it under external coercion,
like pay, for wages, we may admire what he does but we despise what he
is. On the other hand, if he does it out of his own free, creative
expression of himself, under free will, not under external coercion of
wage labor, then we also admire what he is because he's a human being.
He said any decent socioeconomic system will be based on the assumption
that people have the freedom to inquire and create -- since that's the
fundamental nature of humans -- in free association with others, but
certainly not under the kinds of external constraints that came to be
called capitalism.
It's the same when you read Jefferson. He lived a half century later,
so he saw state capitalism developing, and he despised it, of course.
He said it's going to lead to a form of absolutism worse than the one
we defended ourselves against. In fact, if you run through this whole
period you see a very clear, sharp critique of what we would later call
capitalism and certainly of the twentieth century version of it, which
is designed to destroy individual, even entrepreneurial capitalism.
There's a side current here which is rarely looked at but which is also
quite fascinating. That's the working class literature of the
nineteenth century. They didn't read Adam Smith and Wilhelm von
Humboldt, but they're saying the same things. Read journals put out by
the people called the "factory girls of Lowell," young women in the
factories, mechanics, and other working people who were running their
own newspapers. It's the same kind of critique.
There was a real battle
fought by working people in England and the U.S. to defend themselves
against what they called the degradation and oppression and violence of
the industrial capitalist system, which was not only dehumanizing them
but was even radically reducing their intellectual level. So, you go
back to the mid-nineteenth century and these so-called "factory girls,"
young girls working in the Lowell [Massachusetts] mills, were reading
serious contemporary literature. They recognized that the point of the
system was to turn them into tools who would be manipulated, degraded,
kicked around, and so on. And they fought against it bitterly for a
long period. That's the history of the rise of capitalism.
The other part of the story is the development of corporations, which
is an interesting story in itself. Adam Smith didn't say much about
them, but he did criticize the early stages of them. Jefferson lived
long enough to see the beginnings, and he was very strongly opposed to
them. But the development of corporations really took place in the
early twentieth century and very late in the nineteenth century.
Originally, corporations existed as a public service. People would get
together to build a bridge and they would be incorporated for that
purpose by the state. They built the bridge and that's it. They were
supposed to have a public interest function.
Well into the 1870s, states were removing corporate charters. They were granted by the state. They didn't have any other authority. They were fictions. They were removing corporate charters because they weren't serving a public function. But then you get into the period of the trusts and various efforts to consolidate power that were beginning to be made in the late nineteenth century. It's interesting to look at the literature. The courts didn't really accept it. There were some hints about it. It wasn't until the early twentieth century that courts and lawyers designed a new socioeconomic system. It was never done by legislation. It was done mostly by courts and lawyers and the power they could exercise over individual states. New Jersey was the first state to offer corporations any right they wanted. Of course, all the capital in the country suddenly started to flow to New Jersey, for obvious reasons.
Then the other states had to do the same thing just to defend themselves or be wiped out. It's kind of a small-scale globalization. Then the courts and the corporate lawyers came along and created a whole new body of doctrine which gave corporations authority and power that they never had before. If you look at the background of it, it's the same background that led to fascism and Bolshevism. A lot of it was supported by people called progressives, for these reasons: They said, individual rights are gone. We are in a period of corporatization of power, consolidation of power, centralization.
That's supposed to be good if you're a progressive, like a Marxist-Leninist. Out of that same background came three major things: fascism, Bolshevism, and corporate tyranny. They all grew out of the same more or less Hegelian roots. It's fairly recent. We think of corporations as immutable, but they were designed.
It was a conscious design which worked as Adam Smith
said: the principal architects of policy consolidate state power and
use it for their interests. It was certainly not popular will. It's
basically court decisions and lawyers' decisions, which created a form
of private tyranny which is now more massive in many ways than even
state tyranny was. These are major parts of modern twentieth century
history. The classical liberals would be horrified. They didn't even
imagine this. But the smaller things that they saw, they were already
horrified about. This would have totally scandalized Adam Smith or
Jefferson or anyone like that....
David Barsamian: ....You're very patient with people, particularly
people who ask the most inane kinds of questions. Is this something
you've cultivated?
Noam Chomsky: First of all, I'm usually fuming inside, so what you see
on the outside isn't necessarily what's inside. But as far as
questions, the only thing I ever get irritated about is elite
intellectuals, the stuff they do I do find irritating. I shouldn't. I
should expect it. But I do find it irritating. But on the other hand,
what you're describing as inane questions usually strike me as
perfectly honest questions. People have no reason to believe anything
other than what they're saying. If you think about where the questioner
is coming from, what the person has been exposed to, that's a very
rational and intelligent question. It may sound inane from some other
point of view, but it's not at all inane from within the framework in
which it's being raised. It's usually quite reasonable. So there's
nothing to be irritated about.
You may be sorry about the conditions in which the questions arise. The
thing to do is to try to help them get out of their intellectual
confinement, which is not just accidental, as I mentioned. There are
huge efforts that do go into making people, to borrow Adam Smith's
phrase, "as stupid and ignorant as it is possible for a human being to
be." A lot of the educational system is designed for that, if you think
about it, it's designed for obedience and passivity.
From childhood, a
lot of it is designed to prevent people from being independent and
creative. If you're independent-minded in school, you're probably going
to get into trouble very early on. That's not the trait that's being
preferred or cultivated. When people live through all this stuff, plus
corporate propaganda, plus television, plus the press and the whole
mass, the deluge of ideological distortion that goes on, they ask
questions that from another point of view are completely reasonable....
David Barsamian: At the Mellon lecture that you gave in Chicago... you
focused primarily on the ideas of John Dewey and Bertrand Russell
[regarding education]...
Noam Chomsky: ... These were highly libertarian ideas. Dewey himself
comes straight from the American mainstream. People who read what he
actually said would now consider him some far-out anti-American lunatic
or something. He was expressing mainstream thinking before the
ideological system had so grotesquely distorted the tradition. By now,
it's unrecognizable. For example, not only did he agree with the whole
Enlightenment tradition that, as he put it, "the goal of production is
to produce free people," -- "free men," he said, but that's many years
ago. That's the goal of production, not to produce commodities. He was
a major theorist of democracy. There were many different, conflicting
strands of democratic theory, but the one I'm talking about held that
democracy requires dissolution of private power.
He said as long as
there is private control over the economic system, talk about democracy
is a joke. Repeating basically Adam Smith, Dewey said, Politics is the
shadow that big business casts over society. He said attenuating the
shadow doesn't do much. Reforms are still going to leave it tyrannical.
Basically, a classical liberal view. His main point was that you can't
even talk about democracy until you have democratic control of
industry, commerce, banking, everything. That means control by the
people who work in the institutions, and the communities.
These are standard libertarian socialist and anarchist ideas which go
straight back to the Enlightenment, an outgrowth of the views of the
kind that we were talking about before from classical liberalism. Dewey
represented these in the modern period, as did Bertrand Russell, from
another tradition, but again with roots in the Enlightenment. These
were two of the major, if not the two major thinkers, of the twentieth
century, whose ideas are about as well known as the real Adam Smith.
Which is a sign of how efficient the educational system has been, and
the propaganda system, in simply destroying even our awareness of our
own immediate intellectual background.
David Barsamian: In that same Mellon lecture, you paraphrased Russell
on education. You said that he promoted the idea that education is not
to be viewed as something like filling a vessel with water, but rather
assisting a flower to grow in its own way...
Noam Chomsky: That's an eighteenth century idea. I don't know if
Russell knew about it or reinvented it, but you read that as standard
in early Enlightenment literature. That's the image that was used...
Humboldt, the founder of classical liberalism, his view was that
education is a matter of laying out a string along which the child will
develop, but in its own way. You may do some guiding. That's what
serious education would be from kindergarten up through graduate
school. You do get it in advanced science, because there's no other way
to do it.
But most of the educational system is quite different. Mass education
was designed to turn independent farmers into docile, passive tools of
production. That was its primary purpose. And don't think people didn't
know it. They knew it and they fought against it. There was a lot of
resistance to mass education for exactly that reason. It was also
understood by the elites. Emerson once said something about how we're
educating them to keep them from our throats.
If you don't educate
them, what we call "education," they're going to take control -- "they"
being what Alexander Hamilton called the "great beast," namely the
people. The anti-democratic thrust of opinion in what are called
democratic societies is really ferocious. And for good reason. Because
the freer the society gets, the more dangerous the great beast becomes
and the more you have to be careful to cage it somehow.
On the other hand, there are exceptions, and Dewey and Russell are
among those exceptions. But they are completely marginalized and
unknown, although everybody sings praises to them, as they do to Adam
Smith. What they actually said would be considered intolerable in the
autocratic climate of dominant opinion. The totalitarian element of it
is quite striking. The very fact that the concept "anti-American" can
exist -- forget the way it's used -- exhibits a totalitarian streak
that's pretty dramatic. That concept, anti-Americanism -- the only real
counterpart to it in the modern world is anti-Sovietism.
In the Soviet
Union, the worst crime was to be anti-Soviet. That's the hallmark of a
totalitarian society, to have concepts like anti-Sovietism or
anti-Americanism. Here it's considered quite natural. Books on
anti-Americanism, by people who are basically Stalinist clones, are
highly respected. That's true of Anglo-American societies, which are
strikingly the more democratic societies. I think there's a correlation
there...As freedom grows, the need to coerce and control opinion also
grows if you want to prevent the great beast from doing something with
its freedom....
... Sam Bowles and Herb Gintis, two economists, in their work on the
American educational system some years back... pointed out that the
educational system is divided into fragments. The part that's directed
toward working people and the general population is indeed designed to
impose obedience. But the education for elites can't quite do that. It
has to allow creativity and independence. Otherwise they won't be able
to do their job of making money. You find the same thing in the press.
That's why I read the Wall Street Journal and the Financial Times and
Business Week. They just have to tell the truth. That's a contradiction
in the mainstream press, too. Take, say, the New York Times or the
Washington Post. They have dual functions and they're contradictory.
One function is to subdue the great beast.
But another function is to
let their audience, which is an elite audience, gain a tolerably
realistic picture of what's going on in the world. Otherwise, they
won't be able to satisfy their own needs. That's a contradiction that
runs right through the educational system as well. It's totally
independent of another factor, namely just professional integrity,
which a lot of people have: honesty, no matter what the external
constraints are. That leads to various complexities. If you really look
at the details of how the newspapers work, you find these
contradictions and problems playing themselves out in complicated
ways....
This interview was excerpted from Class Warfare, 1995.
Can post a summary or not?
Originally posted by Chew Bakar:Can post a summary or not?
heh first time you read his posts?
Originally posted by Stevenson101:
heh first time you read his posts?
Old man hard to read wall of text. Like ants on the screen.
Excellent post Ah Chia, I didn't notice this one. It almost seems as if Chomsky has switched over to Marxism at some parts of the interview.
Honestly, I've never read "Wealth of Nations" at all. Everything I knew about is what the textbooks tell me, that Adam Smiths advocates Capitalism, the free market and a laissez faire approach to handling the economy. Hearing that he actually denounces capitalism, especially from the interpretation of Chomsky is a quite a shock to me.
I suppose the contents of this interview draws heavy relevance to today's global economy, where we see the rise and fall of private corporations, particularly financial institutions, literally knocking down the economies of states. This shows how much people as individuals have, as countries, have surrendered economic rights over to private corporations. Essentially, economic sovereignty has been ceded to corporations, particularly TNCs.
"He said as long as there is private control over the economic system, talk about democracy is a joke." When we no longer exercise sovereignty over our economics, we no longer exercise any real political sovereignty since economic interests from massive private corporations will attempt to dictate economic policies made by states. Not acceded to economic dictates, would mean marginalization from the global economy that is dominated by private corporations. That alone can spell downfall for peripheral or semi-peripheral countries that rely heavily on the global economy for survival. It is essentially, the domination of a global bourgeoisie over the global proletariate.