The Great Matricide: How Economic Science Murdered Moral Philosophy
By Kenneth W. Stikkers (Southern Illinois University Carbondale)
That economics was born from moral philosophy is well known. What I, as the attorney
for the prosecution, will argue here is that the growth and dominance of economics in the world
today was facilitated by the most heinous of crimes, that of matricide: because Economic
Sciences’ mother, Moral Philosophy, placed constraints upon him that, like a spoiled, illmannered child, he was unwilling to accept—she would not allow him simply to do as he
please—Economic Science murdered his mother.
At the heart of our conference is the same question that, for over two millennia and until
the modern age, was so central to moral philosophers concerned with matters of economy, such
as Plato, Xenophon, Aristotle, and Thomas Aquinas: what is the relationship between economic
prosperity, on the one hand, and human well-being, happiness, and flourishing, on the other?
Since murdering his mother, so that he need not be accountable to her, though, Economic
Science has become unaccustomed to asking such questions. Thus, if we here are to rethink such
a question today, it might behoove us to reinvestigate this crime and to consider, first, how did
economics sever itself from such ethical considerations in the first place? How did it happen that
economists stopped asking such questions? How did economists come to conceive of their
discipline as no longer a moral science and as altogether exclusive of ethics? How is it that
orthodox economists today have forsaken their parentage and think of themselves as strictly
empirical, mathematical scientists with nothing to do with ethics or even philosophy? What
were the historical causes for these developments?
Such are the questions that I have been attempting to answer for many years, and here I
wish to offer my current, condensed, provisional answers, which entail two lines of analyses.
First, I look at the historical forces that led to a general divorce of modern economic practices
from morality and then, second, at how economic theory conceptually severed itself from ethics
in collusion with those historical developments, in an effort to legitimate them..
I. Breaking “the Iron Chains” of Custom
First, there were historical causes for the separation of economy from conventional
morality: indeed, the history of modern Western economy might be read productively, as some,
such as Warner Sombart, have done, as the history of economic forces tearing themselves free
from traditional moral constraint, breaking loose from custom and conventional morality.
The beginning of modern economy, of “capitalism,” is often dated with the first acts of
enclosure in England. Under the medieval system, land was commonly held to belong to all the
people. Feudal lords were not considered “owners” of the land in the modern sense: the land
was not their private possession to do with as they pleased. Rather, they were the stewards of the
land, entrusted with the responsibility of administering it for the common good. As economic
historian R. H. Tawney notes, in medieval society, “Property is not a mere aggregate of
economic privileges, but a responsible office. Its raison d’etre is not only income, but service”
1
to the community1 No doubt lords often failed to exercise good stewardship, but they were held
socially accountable, by the peasants, the church, and even the crown, for making sure that all
the people were provided for, that all had proper access to the land so that they could provide
adequately for themselves and their families. The medieval notion of a “right to life” entailed a
right to livelihood, and in an agrarian economy, that meant the right of access to the land: denial
of access to the land, to farm, graze livestock, hunt, fish, or build was a death-sentence.
There are two central features of medieval agricultural economy that are especially
relevant for our analysis here. First, land was not “owned” by individual families but was
assigned by the lords so that there was relative equality in the quantity and quality available to
each family. All the best land was divided into strips, and each family received a strip in
accordance with its size. Then the next best land was similarly divided and assigned. And so it
was that all of the land was distributed equally in both amount and quality. Occasionally, the
land would be redistributed as families gained or lost members or as land changed, for example,
due to flooding. (Such practices are found still in Africa today.) So the land was divided up into
a quilt-like patchwork of “strips,” covering the countryside. Second, all families enjoyed access
to common pasture areas—“commons”-- for grazing their livestock.
Some historians claim that the first acts of enclosure--decrees by which the common strip
farms and common pastures were claimed as “private property”--occurred in fifteen-century
England,2 but some claim the practices already began in the thirteenth century. Others still claim
a precedent for such actions occurred when Saxon and Norman conquerors took land from
British lords to reward officers and supporters. Indeed, William the Conqueror claimed all the
land as his own and parceled it out as he saw fit,3 and he claimed some lands as his exclusive
hunting grounds. In any case, the practice continued and spread into other parts of Europe,
especially Germany, well into the nineteenth century and claimed not only the strips and
common grazing lands of the peasants but even whole villages and lands of the monasteries,
including their schools. So ironically an economic system that would make the right of property
one of its sacred cornerstones began with enormous acts of theft—such was what the anarchist
Pierre Proudhon suggested when he famously asked, “What is property?“ and answered simply,
“property is theft.” And Jean-Jacques Rousseau offers a similar story in his Discourse on
Inequality.
What were the causes of enclosure? With the collapse of trade throughout Europe,
following the fall of the Roman Empire, there was no strong incentive for feudal lords to exploit
the peasantry to create surpluses for export in order to purchase luxuries from abroad. In the
1
R. H. Tawney, Religion and the Rise of Capitalism: A Historical Study (1926; Gloucester, MA: Peter Smith,
1962), p. 149.
2
Tawney, p. 138.
Larry Patriquin, “The Agrarian Origins of the Industrial Revolution in England,” Review of Radical Political
Economics 36, No. 2 (Spring 2004): 201.
3
2
tenth century the entire annual trade between England and continental Europe could have fit in a
few modern shipping containers. The reemergence of trade, spawned especially by the rise of
the great Italian merchant fleets, created incentives for the production of surpluses, and those
incentives in turn encouraged exploitation of the peasantry, to see the peasantry as a means for
the creation of surplus value and profit.
Furthermore, from a modern business perspective, whose concern is primarily profit, the
traditional strip system appears highly “inefficient”: the strip system was labor-intensive and
could not accommodate new technologies, such as the steel-bladed plow. It would seem more
“efficient” to devote large tracts of land to single agricultural products, at that time, wool, which
was then in great demand on the continent.4 Indeed, already in the seventeenth century defenders
of enclosure claimed that this increased efficiency would eventually benefit everyone—the
earliest version of “trickle-down” economics. So, through acts of enclosure, large tracts of land
were claimed by feudal lords. They sometimes themselves then became agricultural capitalists,
but more often they sold their land to merchants--the “bourgeoisie”--who had gained large
profits from the growing trade and who had much stronger aptitudes for profit-making than did
the lords.
Enclosure produced several effects. It simultaneously met two needs for the rise of
modern economy, or capitalism. First, it created more “efficient” forms of agricultural
production. However, to say that it is more “efficient” is to beg the question of what the proper
measure of economic “efficiency” should be. Efficiency ordinarily is a ratio of outputs to inputs,
or costs, such as kilometers per liter of petrol. What, however, should we consider as our outputs
and costs? If the primary output is production for trade and our costs are labor, then indeed
enclosure appears very efficient, but if the more important output is sustaining the people and
their communities, then enclosure was horribly inefficient. As a result of enclosure, large tracts
of land were devoted to the raising of sheep for the highly profitable wool trade. Only a fraction
of the peasant farmers (typically 10 to 25%) were needed and retained to tend the sheep: most
were driven from their traditional lands and communities and left to fend for themselves--there
were not yet any manufacturing jobs in the cities to employ these displaced people. As Thomas
More described, the sheep devoured the peasants:
Sheep…. These placid creatures, which used to require so little food, have
now apparently developed a raging appetite, and turned into man-eaters. Fields,
houses, towns, everything goes down their throats. To put it more plainly, in
those parts of the kingdom where the finest, and so the most expensive wool is
produced, the nobles and gentlemen, not to mention several saintly abbots, have
grown dissatisfied with the income that their predecessors got out of their estates.
4
Joseph Lee, the rector of a parish church in Leicestershire, who had himself benefited from enclosure, early
and famously advanced the argument defending enclosure on the basis of such improved “efficiency” in A
Vindication of a Regulated Enclosure (1656). Stephen A. Marglin, The Dismal Science: How Thinking Like an
Economist Undermines Community (Cambridge, MA: Harvard University Press, 2008), p.89.
3
They’re no longer content to lead lazy, comfortable lives, which do no good to
society--they must actively do it harm, by enclosing all the land they can for
pasture, and leaving none for cultivation. They’re even tearing down houses and
demolishing whole towns--except, of course, for the churches, which they
preserve as sheep houses.5
The peasants displaced by enclosure would form three new, overlapping social classes
and corresponding personality types, unknown in the medieval world: the (permanently) poor,
the criminal, and the mad. At the end of the sixteenth century Queen Elizabeth returned from a
tour of her kingdom complaining, “Paupers are everywhere!” In less than a century much of
England’s free, prosperous peasantry, the envy of all Europe, had been transformed into roving
bands of beggars and thieves.6 As Thomas More protested earlier, “you create thieves, and then
punish them for stealing!”7 Furthermore, displaced from the land, severed from their
communities, adrift in the countryside or in the anonymity of the newly growing cities, unable to
support their families, and even forced to abandon their children, many were driven to madness.
Michel Foucault describes, in his monumental study of madness, how initially the poor, the
criminal, and the mad were all lumped together as the “unproductive class,” but as these groups
became sorted out and placed under the jurisdictions of different authorities and disciplines, the
madhouse, the poorhouse, and the prison emerged as the West’s three distinguishing institutions
of confinement at the dawn of the “Age of Reason.”8 Caribbean anthropologist Edward W.
Blyden already noted in 1908 that African peoples had early observed that a central and
distinctive feature of European culture was its “three permanent elements—Poverty, Criminality,
Insanity—people who live in workhouses, prisons, and lunatic asylums.”9 To this list we might
add the orphanage.
Second, many from this huge class of dispossessed poor, created by enclosure, would be
recruited into England’s expanding military, which would create the British Empire. On this
point More commented, “thieves do make quite efficient soldiers, and soldiers make quite
enterprising thieves. The two professions have a good deal in common.”10 Later, in the
seventeenth and eighteenth centuries, these dispossessed poor would become the cheap labor that
would fuel England’s industrial revolution.
5
Thomas More, Utopia (1516), trans. Paul Turner (Harmondworth, England: Penguin Books, 1965), Bk. I, p.
46.
6
Robert Heilbroner, The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers,
6th ed. (New York: Simon & Schuster, 1986), pp. 31-32, and Heilbroner, The Economic Problem (Englewood
Cliffs, NJ: Prentice-Hall, 1968), p. 66.
7
More, p. 49.
8
Michel Foucault, Madness and Civilization: A History of Insanity in the Age of Reason (New York:
Random House, 1965).
9
10
Edward W. Blyden, African Life and Customs (Baltimore: Black Classic Press, 1994), p. 37.
More, p. 45.
4
Here are a few descriptions of enclosure by three noted economic historians--Karl
Polanyi, Robert Heilbroner, and R. H. Tawney. Note their common theme: how enclosure
entailed the radical rupture of traditional morality. Polanyi, the founder of economic
anthropology, described enclosure as a "catastrophic dislocation of the lives of the common
people.”11
Enclosures have appropriately been called a revolution of the rich against
the poor. The lords and nobles were upsetting the social order, breaking down
ancient law and custom, sometimes by means of violence, often by pressure and
intimidation. They were literally robbing the poor of their share in the common,
tearing down the houses which, by the hitherto unbreakable force of custom, the
poor had regarded as theirs and their heirs’. The fabric of society was being
disrupted: desolate villages and the ruins of human dwellings testified to the
fierceness with which the revolution raged, endangering the defenses of the
country wasting its towns, decimating its population, turning the overburdened soil
into dust, harassing its people and turning them from decent husbandmen into a
mob of beggars and thieves.12
Robert Heilbroner commented: “The market system ... was ... born in agony. Never was a
revolution less well understood, less welcomed, less planned. But the great market-making forces
would not be denied. Insidiously they ripped apart the mold of custom, insolently they tore away
the usage of tradition,” that is, traditional morality13
Tawney perhaps most succinctly and pointedly described enclosure as "an acid dissolving
all customary relationships,"14 for enclosure entailed not only physical destruction, upheaval, and
dislocation, but also, as the passages from Polanyi and Heilbroner too make clear, the radical
dissolution of moral constraints upon economic activity, rooted in traditional social relationships
and customs. This new class of agricultural capitalists, and then industrial capitalists--the
bourgeoisie--adamantly refused to be bound by traditional morality and to bear the traditional
responsibilities of the feudal lords in tending to the well-being of the peasants and the
community, such as caring for the elderly, the disabled, widows, and orphans. Indeed, they
allowed themselves to be taxed rather than to bear such personal, moral responsibilities. Thus,
those responsibilities would fall at first upon the churches and then upon the State, when the
needs of the displaced peasantry overwhelmed the parishes. Proudhon and Marx correctly
describe the rise of the modern state as the organizing of power in defense of private property,
but the modern state arose also in part to fill the moral void created by the bourgeoisie’s refusal
11
Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Boston:
Beacon Press, 1944), p. 33.
12
Polanyi, p. 35. Emphases added for the sake of later analysis.
13
Heilbroner, The Worldly Philosophers, p. 33.
14
Tawney, p. 137.
5
to bear the feudal lords’ social responsibilities of caring for the people.
Hence we see that the separation of economics from ethics began with economic forces-the rise of this new class, the bourgeoisie--pulling themselves free from moral constraint,
initially the constraints of tradition, custom, and religion, but later also from the constraints of
law and moral philosophy, which they would claim to be interferences in the efficiencies of “free
markets” and “the invisible hand.” In this regard, German sociologist Warner Sombart
poignantly wrote,
Those who believe that the giant Capitalism is destroying both nature and man
cannot but hope that he will be captured and put within bounds that restrained him
of old. Some people, indeed, expected to overcome him by appealing to ethical
principles; I, for my part, can see that such attempts are doomed to utter failure.
When we remember that capitalism has snapped the iron chains of the oldest
religions, it seems to me hardly likely that it will allow itself to be bound by the
silken threads of the wisdom that hails from Weimar and Koenigsberg.15
Since modern economic forces--”capitalism”--have so successful broken the iron chains of
religion and tradition, it would be naïve to expect the relatively weak forces of law, represented
by “Weimar,” and moral philosophy, represented by “Koenigsberg,” to contain them, for
example, through anything like “business ethics.” As Tawney put the matter sharply, “The
upstart aristocracy of the future had their teeth in the carcass, and, having tasted blood, they were
not to be whipped off by a sermon.”16 Joseph Schumpeter takes Sombart’s and Tawney’s point a
step further, suggesting that, because the history of capitalism has been one of utter disregard for
moral constraint upon economic activity, that capitalism eventually turns on itself and comes to
disregard even the inner moral requirements, such as honesty and fairness of competition, that
make it possible for the invisible hand of free markets to function: thereby, and not in the
manner suggested by Marx, does capitalism dig its own grave.
By contrast to Western capitalism, capitalists in Japan tend to be much more the
descendents of Japanese feudal lords--as evidenced by the fact that many of the largest Japanese
businesses bear the names of those lords--and in Japan capitalism maintains much stronger ties to
medieval customs and codes of honor than in the West. Thus, Japanese corporate leaders have
tended to assume the social responsibilities of the feudal lords for the well-being of their
employees, unlike their Western counterparts.17 A sacred bond of trust connects Japanese
15
Warner Sombart, The Quintessence of Capitalism: A Study of the History and Psychology of the
Modern Business Man, trans. M. Epstein (New York: Fertig, 1967), pp. 357-58. Sombart’s comments
raise reservations about anything like “business ethics.”
16
Tawney, p. 143.
“The Japanese corporation is more closely derived from the feudal estate [than in the West] …. In Japan,
paternalism and the responsibility of the feudal lord for all in his demesne have been carried over in the modern
corporation. For example, in Japan the corporation is responsible for a number of welfare activities that are the
responsibility of the state in Europe.” James Samuel Coleman, Foundations of Social Theory (Cambridge MA:
Harvard University Press, 1998), p. 442.
17
6
businessmen with their employees, and Japanese businessmen consider it dishonorable to fire
their employees, while their Western counterparts, especially those in the U.S., consider it a
shrewd business practice for cutting costs. Japanese businessmen will be the first to absorb the
hardships of economic downturn; in the U.S. businessmen are the last to do so (as we saw during
the recent recession).
Enclosure often met with resistance, not only from the displaced peasants themselves, but
also from some of the clergy, such as Bishop Hugh Latimer, members of Parliament, such as John
Hales, and even some of the nobility, such as More and Lord Protector Somerset. Often the
resistance was violent, such as the peasant revolts in Germany (1524-26), fueled by the
Reformation. In England alone between 1610 and 1619 32 rebellions against enclosure erupted,18
and earlier already Robert Kett, a large landowner who experienced a dramatic change of
conscience, led the most famous of these rebellions, which was crushed in 1549: 3500 of Kett’s
followers were slaughter on a single day, and Kett was executed for treason. Somerset was
executed three years later. Occasionally acts of enclosure were repealed and efforts were made to
return land to the peasantry, but such measures were but temporary.
It is important to note that enclosure continues today and lies at the heart of much of the
social unrest that we find in Latin America, Africa, the Philippines, and elsewhere. It began with
wool in England but later included wheat, corn, sugar, coffee, bananas, pineapples, peanut oil-"cash crops"--and also mineral wealth (e.g., throughout South America; oil, in India and Nigeria),
swelling the cities of the developing world, including Mexico City, Sao Paulo, and Lagos.
Indeed, almost 500 years, what More’s described regarding enclosure in England applies equally
to these later instances: enclosure is
like a malignant growth, absorbing field after field, and enclosing thousands of
acres with a single fence. Result--hundreds of farmers are evicted. They’re either
cheated or bullied into giving up their property, or systematically ill-treated until
they’re forced to sell. Whichever way it’s done, out the poor creatures have to go,
men and women, husbands and wives, widows and orphans, mothers and tiny
children.19
As with the early instances in England and Germany, there is often resistance to these modern
forms of enclosure. Sometimes the resistance is peaceful, as with Bishop Oscar Romero, Rutilio
Grande, and Ignacio Ellacuria in El Salvador and Sister Dorothy Stang in Brazil, although all
four of these persons met violent deaths for their resistance at the hands of agriculture capitalists.
In other cases, such as in the Philippines, Nigeria, and Chiapas and Oaxaca, Mexico, resistance
has been armed.
To be clear, there is no effort here to romanticize medieval economy. It is uncertain to
18
R. B. Manning, Village Revolts: Social Protest and Popular Disturbances in England, 1509-1640 (Oxford:
Oxford University Press, 1988), p. 82.
19
More, p. 47.
7
what extent feudal lords of Europe met their social and moral responsibilities to the peasants.
Some did so better than others. What is clear, though, is, such responsibilities were socially
expected. By contrast, in Western capitalist countries today, but not in some other capitalist
nations, such as Japan, there is no social expectation that business leaders bear moral
responsibility for the well-being of their workers and their community. Some do, but it is
considered supererogatory if not a violation of responsibilities to shareholders to maximize
profits. Rather, responsibility for the general well-being of the community, especially the
disadvantaged, is left largely to the state and to private charity. Business leaders are expected
only to pursue their own self-interests by maximizing profit, even when that means inflicting
hardship upon their workers and their community. As economist Milton Friedman famously put
the matter, “The social responsibility of business is to increase its profits.”20
II. Murdering the Mother to Claim the Throne
Economy’s refusal to be restrained by traditional morality, traditional values, custom, and
religion, was accompanied by a radical reconception of the very meaning of morality in order to
make it more compatible with the new social/economic order: the social “good” would be
redefined as whatever best promotes efficient production within the new economic order,
“efficiency,” in turn, being defined by “profit.” How economic forces redefined morality is best
seen in changing notions of property, especially the rise of notions of “private property.”
Let us first note some traditional, pre-modern distinctions regarding notions of
ownership. First, “property” was often distinguished from “possession.” “Possession” pertains
to what one owns by virtue of power (Latin, posse = to be able or to have power), whether it be
physical force or civil law. Having power over something, however, does not necessarily give
one rightful, moral authority over it. “Property,” by contrast, pertains to what one owns
properly, that to which one is morally entitled. “Private property,” then, is the notion that
ownership of something entitles one to exclusive use of that thing and gives one a right to
deprive others of its use, regardless of their needs or those of the community (Latin, privates;
privo = to exclude, to deprive).
Early Christianity taught a communistic ideal, as the Acts of the Apostles describe, and as
Saints Ambrose, Basil, John Chrysostom, Gregory the Great, Clement of Rome, and Augustine
all taught.21 God granted His Creation to all to share; we are but the stewards of what is God’s,
entrusted with Creation for the good of all, and need is what gives one a right to use. The right
of exclusive use was part of ancient Roman property laws, but Jews and early Christians prided
themselves on the fact that they did not share such exclusionary practices and advocated the free
sharing of what one had: such was what made Jews and Christians morally superior to the
mighty Romans.
20
Milton Friedman, “The Social Responsibility of Business Is to Increase Its Profits,” The New York Times
Magazine, September 13, 1970.
21
E.g., Charles Avila, Ownership: Early Christian Teaching (Marykmoll, NY: Orbis Books, 1983).
8
Thomas Aquinas was the first major Christian thinker to justify individual ownership of
property. He used the same arguments that Aristotle used against Plato’s communism in The
Republic: both Aristotle and Aquinas argued that stewardship of property is more effective when
responsibility for it is assigned to individuals rather than left generally and amorphouslyto the
community as a whole.22 The right to property, however, is always limited by the needs of others
and of the community, according to Aquinas: there is no right to exclude those in need from
one’s surplus. So Aquinas asks if it is theft when someone takes something that he needs from
the surplus of another. He answers, no, it is not theft because a person’s need makes him the
rightful owner of that thing. On the contrary, if someone attempts to deprive others from taking
what they need from his surplus, that person would be the thief.23 Also, when one gives to the
needy out of one’s surplus, such giving is “justice,” not “charity”: one is only returning to the
person in need what is rightfully his to begin with; one is merely returning stolen goods.
“Charity” occurs only when we freely share what we ourselves also need. Furthermore, for
Aquinas justice can be enforced by the power of law, while charity must come solely from
Christian love for one’s neighbor.
Thus, unlimited “private property,” as defined above, does not exist for Aquinas: for
him, no one ever is morally entitled to exclude (privare) others in need from one’s own surplus.24
Rather, the restricted, individual property that Aquinas justified was a form of stewardship, a
“responsible office” rather than an individual right.25 This principle was more recently
reaffirmed by Pope John Paul II in his encyclical Laborem Exercens: “the right to private
property is subordinated to the right to common use, to the fact that goods are meant for
everyone.” “From this point of view,” the Pontiff continued, “the position of ‘rigid’ capitalism
continues to remain [morally] unacceptable [to Christianity], namely the position that defends
the exclusive right to private ownership of the means of production as an untouchable ‘dogma’
of economic life.”26 As Sombart described, though, the “giant” Capitalism has snapped these
“chains” of traditional morality, and hence the Pope’s pronouncement fell impotently on
capitalists’ deaf ears.
We thus see how modern economic forces--those of enclosure--redefined radically the
very meaning of “property,” and such redefinition provides a prime example of how modern
economy redefined the social understanding of ethics generally and specific moral categories in
particular, to bring them into line with the new economic order that had broken the “iron chains”
of traditional morality: those forces denied ethics the right to serve any longer as an external
22
Thomas Aquinas, Summa Theologiae, Pt. II of Pt. II, Ques. 66, Art. 1.
23
Ibid., Pt. II of Pt. II, Ques. 66, Art. 6.
A “rich man … sins if he excludes others indiscriminately from using” something they need. Thomas
Aquinas, Summa Theologiae, Pt. II of Pt. II, Ques. 66, Art. 1.
24
25
26
Tawney, p. 149.
John Paul II, Laborem Exercens, 3rd Encyclical Letter, September 14, 1981, III, 14. Emphasis in the original.
9
restriction upon economic life but would recast ethics to serve the needs of the new regime of
capital: traditional moral concepts, such as “property,” were radically redefined in order to be
more consistent with the new economic order. Hence, throughout the history of capitalism many
defenders of “free markets” and “free enterprise,” conceive “freedom” as the absence of external
constraints--customary, moral, religious, and even legal--upon market activity. The normative
imperatives of this new order, however, now bear the name not of the “ethical” but of the
“economical”: the “economical” has assumed the normative force of what traditionally had been
termed the “ethical.” As British economist E. F. Schumacher poignantly put the matter:
In the current vocabulary of condemnation there are few words as final and
conclusive as the word “uneconomic.” If an activity has been branded as
uneconomic, its right to existence is not merely questioned but energetically
denied. Anything that is found to be an impediment to economic growth is a
shameful thing, and if people cling to it, they are thought of as either saboteurs or
fools. Call a thing immoral or ugly, soul-destroying or a degradation of man, a
peril to the peace of the world or to the well-being of future generations; as long
as you not shown it to be “uneconomic” you have not really questioned its right to
exist, grow, and prosper.27
Heilbroner well describes how this new ethics conceals itself “behind the veil of economics,”
disguising its normative pronouncements as strictly the descriptive claims of an “empirical
science.”28
Having examined the historical forces that drove a wedge between economy and
traditional morality, let us now examine the conceptual separation of economics from ethics,
looking especially at how the modern science of economics came to conceive itself as no longer
a branch of moral philosophy, but as lying altogether outside of ethics.
In the later half of the eighteenth century Adam Smith, like many other thinkers of the
time, was trying desperately to make sense of a social world that had ceased to make sense: the
traditional rules of social and economic life, of morality, seemed to have all been thrown to the
wind. The philosophers of nature, however, seemed to be making better sense of the natural
world than moral philosophers were able to make of the social world: when one compared
Newton‘s physics to Aristotle‘s, as many did, there appeared to be vast, undeniable progress, but
when one compared Aristotle‘s ethics to eighteenth-century ethical treatises, it was much harder
to make such a claim. So Smith, like other moral philosophers, such as Francois Quesnay,
looked for help from the natural sciences. Might moral philosophy model itself upon the natural
sciences, or even become a natural science itself? Inspired by William Harvey’s theory of blood
27
E. F. Schumacher, Small Is Beautiful: Economics as if People Mattered (New York: Harper &
Row, 1989), p. 44.
28
Robert Heilbroner, Behind the Veil of Economics: Essays in the Worldly Philosophy (New York: W. W.
Norton, 1988), pp. 13-34.
10
circulation, Quesnay imagined money to be the life-blood of economy and offered the first
circulatory theory of currency: money circulates in a healthy body-politic in a manner analogous
to the way in which blood circulates in individual organisms, and to this day the metaphor of
circulation dominates economists’ understanding of money. Smith, however, was taken much
more by the revolutionary theories of Newton in physics: they would be central to his efforts to
offer a radically new understanding of economic justice.
Indeed, Smith followed a long philosophical tradition, including Plato, Aristotle,
Aquinas, and many others before him, in seeing that a strong society and healthy economy rested
upon justice, and his famous Wealth of Nations might be read as a treatise on economic justice,
although few economists have done so.
That economic well-being rests upon justice, is a point first made by Plato. His Republic
begins with Socrates asking Cephalus, the father of his friend Polemarchus and a wealthy
businessman, what the greatest benefit is that his wealth has provided him. Interestingly,
Cephalus replies that his wealth has enabled him to be a more just man: his wealth allows him to
give to his friends what they deserve, whereas, if he were poor, his poverty might force him to
unjustly cheat and lie. That, claims Cephalus, is the greatest benefit of his wealth. The rest of
Plato’s Republic is then largely a refutation of Cephalus, insofar as Socrates claims that Cephalus
has matters reversed: wealth is not the basis for justice; justice is not some luxury that wealth
affords us. No, rather, Socrates claims, justice is the basis for affluence: without the social
harmony that is justice, there will not be the cooperation among people in specialized
occupations that is necessary for economic prosperity.
Smith agrees with Plato and the whole classical tradition that affluence rests upon justice.
In The Theory of Moral Sentiment (1759) he writes: "Justice … is the main pillar that upholds
the whole edifice [of society]. If it is removed, the great, the immense fabric of human society . . .
must in a moment crumble into atoms."29 And throughout The Wealth of Nations Smith claims
that the greatest benefit of the system of “perfect liberty” that he describes is that it provides “the
fairest, the most equitable” distribution of goods possible.
How, though, is a just society to be achieved? On this point Smith breaks radically from
the classical tradition. For thinkers of antiquity and the middle ages, a just society comes from
just, virtuous rulers. For Plato, this means that the just society requires leadership by the
philosopher-kings, who, among mortals, best understand the true nature of justice. Just rulers, in
turn, need to be properly educated, in the manner Plato describes.
The social chaos that marked the beginning of the modern age, however, brought
skepticism regarding this tradition of moral education as the way to a just society and a general
cynicism over whether a just society was even possible. Niccolo Machiavelli in one stroke
radically redefined “politics.” The classical tradition had defined it as the art of just rulership:
29
Adam Smith, The Theory of Moral Sentiments, ed. D. D. Raphael and A. L. Macfie (Indianapolis: Liberty
Classics, 1982), II, ii, 3.4, p. 86.
11
Machiavelli redefined it as the artful management of power. He, followed by Thomas Hobbes
and Bernard Mandeville, advised political thinkers and rulers not to concern themselves with
“man as he ought to be” but with “man as he really is,” and “man as he really is,” according to
their descriptions, is not a very nice person.30
Smith, however, did not abandon justice, as did Machiavelli and others following him,
but he did suggest that a just society might be possible without virtuous individuals, that is,
despite being ruled by individuals who themselves are not necessarily just. Mandeville had
already suggested that society might function and even prosper without virtuous individuals, in
his famous Fable of the Bees, but it was Smith who described the mechanism, built, as we
already saw, upon the principles of Newton’s mechanics, by which such might occur. To be
clear: unlike Mandeville, whom Smith criticizes severely in his Theory of Moral Sentiment,
Smith thinks that a society of virtuous individuals is certainly desirable and better than one
without such individuals, but he nonetheless imagines the possibility of a just and hence
prosperous society without them. He writes: “Beneficence … is less essential to the existence of
society than justice. Society may subsist, though not in the most comfortable state, without
beneficence; but the prevalence of injustice must utterly destroy it.” Virtue “is the ornament
which embellishes, not the foundation which supports the building,” viz., society.31
Like the ancients, Smith conceives of justice as a kind of harmony. In The Republic Plato
describes the just soul as one whose three main parts--the appetites, the will, and the intellect--all
work harmoniously together, under the rulership of the intellect (nous), for the good of the
person as a whole. Analogously, Plato describes the just society as one in which its three main
classes--the workers, the guardians, and the philosopher-kings--are all harmonized under the
rulership of the latter, with their minds’ eyes steadily fixed upon the Form of the Good, for the
well-being of the society as a whole. So, too, Smith sees social justice as a sort of harmony, but
not like the one that Plato describes.
Furthermore, like the ancients, Smith, too, sees the harmony that makes for a just society
as analogous to the harmony that makes the universe a cosmos, that is, a thing of beauty.
Newton’s mechanics so impressed Smith that he looked to it for clues about how a just society
might be constructed. Heavenly bodies, such as Jupiter and its moons, remain in harmonious
relations as the result of the counter-balance of gravitational pull and centrifugal force. Indeed,
the famous term, “invisible hand,” first appears in one of Smith treatises on astronomy to
describe how the moons of Jupiter stay in their orbits. Analogously, might the social harmony
necessary for a prosperous society be created by the proper balance between opposing economic
interests, namely those of supply and demand? A brilliant hypothesis, even if wrong!
Smith’s proposal for a just society, in The Wealth of Nations, requires that no one--no
ruler, no philosopher-king--needs to think about what justice or the common good is, nor need
30
Albert O. Hirschman, The Passions and the Interests: Political Arguments for Capitalism before Its Triumph
(Princeton, NJ: Princeton University Press, 1997), pp. 12-14.
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one intend actions in accord with such principles. Rather, each person needs to consider and to
intend only his or her own self-interest, as a supplier or as a buyer, and these counter-balancing
forces, comprising the mechanism of the invisible hand, which God built into the universe, do
the rest, producing social justice without anyone intending it. In Smith’s most famous passage,
he tells us that a buyer “intends only his own gain” when he makes a purchase, “and he is in this,
as in many other cases, led by an invisible hand to promote an end [viz., the social good] which
was no part of his intention. Nor is it always the worse for the society that it was no part of it. By
pursuing his own interest [the buyer, and the seller as well] frequently promotes [the interest] of
the society more effectually than when he really intends to promote it.”32 As John Maynard
Keynes put the matter, Smith’s system allows moral philosophers to take early retirement.33
Classical theories of ethics, however, saw intent as necessary, if not sufficient, for
counting actions as “ethical.” Aristotle, for example, defines an ethical act as one in which one
not only does the right thing but also does it “for the right reason,” that is, with the right
intention. Thomas Aquinas is perhaps most to the point: “Any individual act has some
circumstance by which it is drawn into the class either of good or bad acts, at least in virtue of the
intention.... But if an act is not deliberate ... it is not properly speaking a human or moral act. ...
And so it will be indifferent, that is, outside the class of moral acts.”34
Smith, however, in his Theory of Moral Sentiment, claims that only God can look into
one’s soul and judge the goodness of one’s intentions: humans can only judge the empirical
outcomes of actions. “[M]en in this life are liable to punishment for their actions only, not for
their designs and intentions.”35 Smith thus broke radically from the classical tradition of ethics
by denying that right intentions are necessary for ethical actions. Thus, from the perspective of
classical ethical theory, Smith not only destroyed the long-held connection between economics
and ethics, but he actually killed ethics altogether, at least as it pertains to economy, although he
certainly never intended to do so. Or, one might say, alternatively, that Smith radically redefined
“ethics” solely in terms of the goodness of outcomes, and disregards the agent’s motives or
intentions. He might, thereby, be considered the father of ethical consequentialism.
If, though, the social good results unintentionally from the self-interested actions of
buyers and sellers in the market, then are we not at least implicitly obligated morally to act in
self-interested ways? Smith does not say this directly, but it does seem to be the inference that
we must draw from his famous passage that speaks of the “invisible hand.” Some of his
followers, however, have made explicit statements to this effect. For example, Friedman, in his
famous dictate, which we quoted above, clearly transforms profit-making from a simple matter
31
Smith, Theory of Moral Sentiment, p. 86.
32
Smith, Wealth of Nations, Bk. IV, Ch. II.
33
Keynes, “The End of Laissez-faire,” 1926
34
Thomas Aquinas, Summa Theologiae, Pt. I of Pt. II, Ques. 19, Art. 9.
35
Smith, Moral Sentiment II, iii, 3, 2, p. 105.
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of prudential self-interest into a moral imperative. By the logic of Smith’s theory, which
Friedman follows, one is obliged ethically and ironically not to act ethically, at least in the
traditional sense, that is, to restrain one’s self-interests in consideration of the common, social
good. Rather, the highest moral imperative of economic agents—buyers and sellers—is to
pursue their own self-interests: failure to do so inhibits the free market from producing a just
and prosperous society, what economists commonly term “market equilibrium.” As Hermann
Heinrich Gossen suggested, in 1854, to act from a sense of the common, social good is to display
the hubris of supposing that one knows better than the invisible hand--a.k.a. God--what that
common good is: “How can a creature be so arrogant as to want to frustrate totally or partially
the purpose of his Creator?” he asks.36
Conclusion
Thus, we might say that classical economics thereby killed ethics altogether, traditionally
understand as including the intentions of agents. Kantian philosopher of economics Kenneth
Lux argues such a view in his well-titled Adam Smith‘s Mistake: How a Moral Philosopher
Invented Economics and Ended Morality.37 Or, we might say instead, as Heilbroner suggests,
that economics created a new sort of ethics but called it “economic science,” a science that Smith
modeled upon the natural sciences but which later became a mathematical science, and to moral
philosophy this economic science would bid not so fondly, “adieu.” In either case, Moral
Philosophy is dead to its son, Economic Science, as we see in the conceptual separation of
economics from ethics, which characterizes orthodox economic thinking in so much of the West
today. This conceptual separation followed the historical separation of economy from traditional
morality and is seen already in the theories of Adam Smith. In short, modern Economic
Science’s growth and dominance in the world today required it to separate itself from and even
murder its mother, Moral Philosophy.
So, if we are to reexamine the relationship between economic prosperity and human wellbeing, as our conference proposes to do and as I think we should, we will better grasp the
difficulty of the task before us if we understand how powerful the historical currents of modern
economy and economics have been in the opposite direction. The history of modern economy
has been the history of economic forces breaking free from all moral constraints other than what
capitalism’s own inner logic requires. Accordingly the edifice of modern economic science has
been built upon the tomb of Moral Philosophy, as illustrated by the deeply entrenched
assumption of a (false) fact-value dichotomy and the American Economics Association
resistance to any sort of code of ethics for the profession. Therefore, any effort to think once
again the ethical relationship between economic prosperity and human well-being will require
nothing less than a radical and thoroughgoing critique of the history of modern economy and
economics and a rethinking of the latter from its very foundations.
36
Gossen, The Laws of Human Relations (1854; Cambridge: MIT Press, 1983), p. 4.
37
(Boston: Shambhala, 1990).
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