By Federico Aguilera Klink
The distinction between benevolence, or charity, and justice is, from my point of view, of great relevance at a time when the family has been defined as an NGO and when it seems that “solidarity” is very good to “cover up” or hide the injustice intrinsic to an economic system and the injustice of a situation defined as a crisis but which in more precise language is nothing more than a looting of the public and of social and human rights by the public. entrepreneurs, something that mp is alien to what Adam Smith already observed in his time. The difference is that now a supposed “democratic” situation is used to “legitimize” the aforementioned looting, “for the good of all”.
Galbraith, a lucid Canadian-born economist, said in 1973 that "Adam Smith is too wise and entertaining to relegate him among conservatives, few of whom have ever read him" (Annals of an unrepentant liberal). The problem is that it seems that those who say they are not conservative have not read it either and thus, in my opinion, we are missing a person whose lucid and thoughtful reflections could help us better understand what is happening at the same time enjoy your reading. In addition, Adam Smith paid attention to the motivations that could explain the behavior of people, not trying to label them but to understand them in order to better understand what type of society one is in and what we can expect from ourselves and from others. To begin with, and against the cliché that he defended selfishness as a fundamental motive of human behavior, I think it is worth highlighting some paragraphs of his Theory of Moral Sentiments, originally published in 1759.
The human being: selfishness and compassion
Thus, on the first page of this book, he writes, “No matter how selfish man may be supposed, there are evidently in his nature some principles that make him interested in the fate of others, and make their happiness necessary for him, although nothing derives from it other than the pleasure of contemplating it. Such is the case of pity or compassion, the emotion we feel in the face of the misfortune of others when we see it or when we are made to conceive it in a very vivid way (...) this feeling (...) is not at all limited to the most virtuous and humanitarian (…) neither the greatest criminal nor the most brutal violator of society's laws is totally devoid of him (…) As we lack immediate experience of what other people feel, we cannot get any idea in the way they are affected, unless we think about how we would feel in their same situation ”(…) we are affected by what the person who suffers feels, by putting ourselves in their place”.
It is very interesting to see that these intuitive insights based on observation and made more than two centuries ago basically coincide with what is currently known about human behavior. Thus, Frans de Waal, in The monkey that we carry inside (2005) argues that we are “bipolar monkeys” and that “The vision that portrays us as selfish and petty, with an illusory morality, must be revised. If we are essentially anthropoids (…) or at least descendants of anthropoids, then we are born with a range of tendencies, from the most basic to the most noble. Far from being a product of the imagination, our morality is the result of the same selection process that shaped our competitive and aggressive side ”.
Therefore, we are selfish and, at the same time, compassionate. And that's why Smith studies selfishness and also compassion or empathy. In other words, the ability to put ourselves in the place of others is one of the issues to which Smith devotes great attention, even specifying that there is another system that "tries to explain the origin of our moral feelings through compassion but that is different from what I have tried to expose since it defends that virtue consists in utility ”.
Economy, justice and prudence
In other words, Smith distances himself from utility as the basis for virtuous or desirable behavior and insists that "The prudent man improves his own only when he does not unfairly affect others", making justice the basis of the entire system. That is why he goes so far as to affirm that “In the race to riches… he can run with all his might (…) But if he pushes or knocks someone down, the spectators' indulgence vanishes. It is a violation of fair play, which they will not be able to accept (…) society can never subsist among those who are constantly ready to hurt and harm others (…)
Benefit, therefore, is less essential to the existence of society than justice. Society can be maintained without charity, although it is not the most comfortable situation; but if injustice prevails, its destruction will be complete (…) Benefit… is the adornment that beautifies the building… Justice, on the other hand, is the fundamental pillar on which the entire building rests. If it disappears, then the immense fabric of human society ... in a moment will be pulverized into atoms.
This distinction between benevolence, or charity, and justice is, from my point of view, of great relevance at a time when the family has been defined as an NGO and when it seems that “solidarity” is very good. to “cover up” or hide the injustice intrinsic to an economic system and the injustice of a situation defined as a crisis but which in more precise language is nothing more than a looting of the public and of social and human rights by the public. entrepreneurs, something that is not alien to what Adam Smith already observed in his time. The difference is that now a supposed “democratic” situation is used to “legitimize” the aforementioned looting, “for the good of all”.
The damaging effects of high profits
Perhaps it is this insistence on the importance of "moral feelings" and his anger at the behavior of businessmen that makes him express himself with a virulence that, from my point of view, reflects the enormous lucidity that has not been seen in the Smith "labeled" as the "inventor" of the invisible hand. In this sense, his reflections on the behavior of entrepreneurs, collected in The Wealth of Nations, published in 1776, are anthological and highly topical.
For example, their criticism of businessmen for regularly complaining that the economy is bad due, according to them, to high wages is little known, an excuse that continues to be repeated over and over again in a situation whose original cause has nothing to do with it. with high salaries, so they are unwilling to acknowledge that high benefits may be a more serious problem. "Our merchants and industrialists complain a lot about the damaging effects of high wages, because they raise prices and therefore restrict the sale of their goods at home and abroad. They say nothing about the damaging effects of high profits. They are silent about the pernicious consequences of their own earnings. "
Does this ring a bell? It seems very appropriate to contextualize recent labor reforms, including Zapatero's. In fact, it gives the impression that it is not necessary to know anything about economics because, whatever the cause of the problem to be solved, the solution imposed by the different governments (it does not matter if it is the PSOE, the PP or the possible combinations of any of them with the so-called nationalist parties) always consists of lowering wages and pensions. Which government is interested in honestly debating and delving into the causes of looting that could lower wages and pensions?
Control of wages (and of Parliament) by employers
And how are wages formed? Do they have something to do with productivity? That is not what Smith seems to think, since “Employers are always and everywhere in a kind of agreement, tacit but constant and uniform, not to raise wages above the rate that exists at all times. Violating this concert is everywhere the most unpopular act, and exposes the employer who commits it to reproach among his neighbors and his peers. It is true that we rarely hear about this agreement, because it is the usual state of affairs, and one could say natural, that no one ever hears about (...) Employers sometimes enter into private unions to sink wages below that rate. They are always planned with the utmost silence and secrecy until the moment of their execution, and when the workers, as sometimes happens, submit without resistance, they go completely unnoticed. "
On the other hand, he knows that Parliament is at the service of employers. “Workers want to get as much, and employers want to deliver as little, as possible. It is not difficult to foresee which of the two parties will usually prevail in the bid, and will force the other to accept its conditions. Employers, being fewer, can associate more easily; Furthermore, the law authorizes or at least does not prohibit their associations, but it does prohibit those of workers (…) We do not have laws from Parliament against unions that seek to lower the price of labor; but there are many against unions that aspire to raise it (…) In addition, in all these conflicts the bosses can resist for much longer ”.
Business interests, rules and social interests
And there are not many doubts left about what according to him we can expect from the regulations and laws proposed by businessmen as hypothetical interested in the common good. On the contrary, the usual is to expect from them deception and oppression. In a wise vignette in El Roto, one politician tells another: "You no longer believe lies" and the other answers: "This is not how you can govern."
And indeed, Smith wrote: “Any proposal for a new business law or regulation that comes from this category of people (entrepreneurs) should always be considered with the utmost caution, and should never be adopted until after long and careful investigation. , developed not only with the most scrupulous care, but also with the utmost suspicion. Because he will come from a class of men whose interests never exactly coincide with those of society, who generally have an interest in deceiving and even oppressing the community, and who have in fact deceived and oppressed it on numerous occasions ”.
It seems clearer that it cannot be said and, nevertheless, in Lessons of jurisprudence, which constitute the notes taken by one of his students in the academic year 1762/63, he comes to affirm even more forcefully, and possibly following Tomás Moro in the final part of his Utopia, that “Laws and government can be considered…, in all cases, as a coalition of the rich to oppress the poor and keep to their advantage the inequality of goods that, otherwise It would soon be destroyed by the attacks of the poor ”.
Of course, these quotes do not correspond to the Adam Smith who "dispatches" himself as that supposed staunch defender of the supposed free market that, supposedly, guided the invisible hand. As Galbraith said of Smith, “Few writers ever, and certainly no economist since, have been so funny, lucid, or resource-rich, or, as the case may be, so devastating (…) With their contempt for theoretical subterfuges and their keen interest in practical matters, I would have had difficulty obtaining a full tenure professorship at a top-tier modern university ”. That is why I encourage you to read it, to enjoy its wisdom and not to leave it to those who manipulate it, either despising it or appropriating it, yes, without having read it in any case.
Federico Aguilera Klink He is Professor of Ecological Economics at the University of La Laguna (Tenerife, Canary Islands). March 2012