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.
http://informationclearinghouse.info/article22546.htm