Monday, August 01, 2016

Adam Smith's Commentary on Donald Trump, Hillary Clinton, and Khizr Khan

If Adam Smith had been a commentator for Laissez Faire News at the Republican and Democratic Party Conventions, what would he have said about the candidacies of Hillary Clinton and Donald Trump?

That was the question in my mind as I watched large parts of the two conventions on C-Span.  I didn't watch all of it because in recent weeks I have been reading Smith and Deirdre McCloskey's interpretation of Smith in her book Bourgeois Equality.  I watched C-Span because it broadcasted the conventions without any interruption by commentators.  Occasionally, I watched the commentators at MSNBC and Fox News, but I really wanted to hear Smith's commentary for Laissez Faire News.

I found one line in McCloskey's book that Smith might have used to characterize both Clinton and Trump: "The haunting fear . . . that ordinary people might do bad things if left alone" (p. 207). 

Clinton fears that if left alone, some ordinary people might voluntarily work for a wage of less than $15 an hour, and therefore this should be prohibited by the federal government.  Trump fears that if left alone, some ordinary people might voluntarily purchase some cheap goods imported from China, and therefore the federal government should impose high tariffs to prevent people from doing this.

So both Clinton and Trump are afraid that ordinary people might do bad things if they are left alone and not coercively regulated by the government.  In this way, both seem to reject what Smith called "the obvious and simple system of natural liberty" in The Wealth of Nations (Liberty Fund edition, p. 687):
"All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord.  Every man as long as he does not violated the laws of justice, is left free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.  The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society."
Do Clinton and Trump agree with this "system of natural liberty"?  Well, yes and no.  No, because Clinton doesn't want ordinary people to have the liberty to work for "unfair wages," and Trump doesn't want ordinary people to have the liberty to engage in "unfair trade."  But, yes, on many points, Clinton and Trump agree that ordinary people have the natural liberty to live as they please.

So, for example, Clinton and Trump agree that ordinary people have a natural liberty to marry whomever they please.  And even those conservative Republicans who resist the legalization of gay marriage agree that homosexuality should not be punished as a crime, as it was until just a few years ago.

Clinton and the Democrats have warned against Trump as a threat to natural liberty, because while Trump has presented himself as the only person who can rightly rule over America, Americans don't need anyone to rule over them, because they can rule themselves, and such self-rule is the liberty to which America is devoted.  Barack Obama and other speakers at the Democratic Convention made this argument.

Trump has warned that if Clinton is elected, the United States will become "another Venezuela"--a socialist regime without individual liberty.  And, of course, Clinton has been endorsed by Bernie Sanders, who calls himself a socialist.  But even Sanders is not really a socialist, because he doesn't believe that the state should own the means of production and set all wages and prices.  Sanders agrees with the decision of the British Labour Party in 1995, under the leadership of Tony Blair, to reject Clause IV of the 1918 text of the Labour Party constitution, drafted by Sidney Webb: "To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service.

Rejecting "the common ownership of the means of production, distribution, and exchange" is rejecting socialism and affirming liberalism.

Sanders admires the "democratic socialism" of the Scandinavian countries.  But even those countries are largely free market societies, and thus conforming largely to Smith's system of natural liberty.  When classical liberal think tanks--like the Frazer Institute, the Heritage Foundation, and the Cato Institute--rate countries around the world for their levels of "economic freedom," the Nordic countries (like Denmark, Finland, and Sweden) rank near the top.

What this shows is that Francis Fukuyama really was correct in 1989 in proclaiming the triumph of liberalism at the "end of history."  In North America, in Europe, and increasingly around much of the rest of the world, most people have mostly adopted Adam Smith's liberalism of natural liberty.  I say "mostly," because many people even in the most liberal societies have some fear that in some areas of life ordinary people might do bad things if left alone.

The great ideological battle in the 20th century was between liberalism, socialism, and nationalism.  Liberalism has largely won that battle.  But now we continue to have relatively minor disputes between liberal socialists (like Hillary Clinton) and liberal nationalists (like Donald Trump).  I say that this is a minor dispute because they share so much in common.  For example, both Clinton and Trump are leaning towards the mercantilism that Smith renounced, because both are turning away from free trade towards protectionism. 

A deeper dispute is between Clinton/Trump on one side and Gary Johnson on the other, because Johnson represents full liberalism--a full commitment to Smithian natural liberty, which assumes that we can trust ordinary people to do good things if left alone.  (On some issues, however, even Johnson is not as purely liberal as some libertarians would like.)

The deepest ideological dispute over Smithian liberty that we see today is between illiberal Islamism and liberal Islamism.  The illiberal Islamists believe that any good society must be a closed society in which moral, political, and religious order must be coercively imposed by law, as in Sharia.  In this way, the illiberal Islamists represent the scorn for bourgeois liberty and equality that prevailed in the world up to the 18th century.

The primary point made recently by Mr. Khizr Khan and his wife Ghazala in their dispute with Trump is that Trump has mindlessly refused to distinguish between the liberal Islamism of the Khans and most other Muslims and the illiberal Islamism that supports Sharia and terrorist holy war.

The dispute between the Khans and Trump could become a turning point if it drives many Republicans to embrace Gary Johnson as the best alternative to Trump--a fully liberal alternative.  As a full liberal, Johnson supports a policy of free immigration as part of the Smithian system of natural liberty.  Liberal people like the Khans who have chosen to immigrate to the United States because they think this will give them the liberty to live their lives as they please, so long as they do not attack the equal liberty of others to live as they please, are the kind of people who will make the United States richer and greater.

But why should we accept the fundamental premise of Smithian liberalism that we can trust ordinary people to do good things when they are left alone?  Smith's answer is that in a free society there are three kinds of restraints on how people live their lives as based on three virtues--prudence, temperance, and justice.

In The Wealth of Nations, Smith argues that in a commercial society, voluntary trading enforces good conduct through the motive of prudence: dishonest businesspeople lose their customers.

In The Theory of Moral Sentiments, Smith argues that in a moral society, people learn temperance, because they must restrain their selfish impulses to win the approval of others and avoid their blame: we thus judge our conduct by whether it would be approved by an impartial spectator.

In Lectures on Jurisprudence, Smith argues that in a just society, government enforces laws of justice that protect property and persons from violence and fraud.

Smith admits, however, that there will always be a few people in every society who are by nature without a moral sense or conscience, who show "a complete insensibility to honor and infamy, to vice and virtue" (Theory of Moral Sentiments, III.2.9).  In their most extreme form, we might today call such people psychopaths.  Lacking in moral self-restraint, such people might suffer from their imprudence--such as dishonest businesspeople who lose their customers--or they might be punished by the laws of justice.  But what about those that David Hume identified as "clever knaves," people who lack a conscience, and who are clever enough to hide their immorality from those around them.

What can be done with a dishonest businessman like Donald Trump?  Mr. Khan has declared: "Shame on you, and shame on your family."  He has said that Trump has a "dark soul"  But a man like Trump is shameless, and so moral blame doesn't bother him.  But if most American voters do have a moral sense and a sense of shame, then we might hope that they will punish him with electoral defeat.

We might expect that his dishonest business practices would be punished by the victims of his fraudulent deals or by the legal system.  But it's not clear that that has happened.  Through his clever use of the American laws of bankruptcy and the American legal system, Trump has often made profits for himself while defrauding his customers and his workers.  The lesson here, Smith might have suggested, is that this shows the failure of the American legal system to enforce justice in punishing dishonest deal-makers like Trump.

Here I disagree with McCloskey, who points to Trump as an example of a businessman who "offends" us by his behavior, but who is "not a thief" because he has earned his profits through voluntary deals (229-30).  But the reports about Trump's business practices suggest that in refusing to pay his bills and in defrauding his customers (like the students who signed up for Trump University), Trump really has been a thief.

Of course, one might wonder how successful he has really been.  One possible reason why he refuses to release his tax returns is that they would show that he is not nearly as rich as he claims to be.

Ultimately, the fitting and proper punishment for morally despicable human beings is that they must live the life of morally despicable human beings.  No intelligent person would choose to live the life of Donald Trump.

I have previous posts on Trump (here, here, and here,), on Johnson (here and here), and on liberal Islamism (here and here).


Anonymous said...

If there's one person who has no shame in the election it is Hillary.

Anonymous said...

Please for the love of God stop commenting on the current election. It tarnishes all of your theoretical posts by association.

CJColucci said...

The only thing that threatens to tarnish our host by association is the comment threads.

Anonymous said...

I have no problem with the election commentary, but I do wonder if the blog wouldn't be better titled "Darwinian Libertarianism." Or perhaps most accurately: "Darwinian Classical Liberalism." The position that Dr. Arnhart now espouses does not seem linked to "conservatism" per se. In fact, it's quite critical of many types of "conservatism" (and for good reasons). It is equally critical of left and right when partisans from either side fail to root their positions in an analysis of human nature grounded in evolutionary biology.

Roger Sweeny said...

Rejecting "the common ownership of the means of production, distribution, and exchange" is rejecting socialism and affirming liberalism.

The modern Labour Party and Bernie Sanders certainly reject traditional socialism but they hardly affirm liberalism. What we seem to be getting is a system where much economic activity is in private hands but more and more government tells those private hands what to do.

In some ways, it's a sweet deal for modern socialists. Anything that goes wrong can be blamed on "the corporations." After all, they are private companies and private companies try to make profits; they are greedy. Even if the industry is very heavily regulated, like medical care and finance, it will be easy to frame the problem as doctors or hospitals or insurance companies or banks having too much freedom. And the solution, of course, is more government regulation.