RECIPROCATING MONADS: INDIVIDUALS, THE WEALTH OF NATIONS, and THE DREAM OF ECONOMIC SCIENCE
| Author | Robert Urquhart |
| Date | 01 November 1994 |
| Published date | 01 November 1994 |
| DOI | http://doi.org/10.1111/j.1467-9485.1994.tb01135.x |
Scottish
Journal
of
Politiml
Economy,
Vol.
41.
No.
4,
November
1994
0
Scottish Economic Sociely
1994.
Published by Blackwell Publishers,
108
Cowley Road, Oxford
OX4
IJF,
UK
and
238
Main
Street.
Cambridge. MA
02142,
USA
RECIPROCATING MONADS:
INDIVIDUALSy THE WEALTH
OF
NATIONS,
AND THE DREAM
OF
ECONOMIC SCIENCE
Robert Urquhart
*
I
INTRODUCTION
The traditional view
of
Adam Smith, focusing almost entirely
on
The Wealth
of
Nations,
tended to over-emphasize his closeness to modern economics and
his distance from his contemporaries and predecessors. Recent work has cor-
rected this tendency, placing
The Wealth
of
Nations
in the context
of
his other
works, and especially
The Theory
of
Moral Sentiments
and his whole output
in the context of 18th century British and European thought. There can be
no doubt at
all
of
the superiority
of
the new view
of
Smith emerging from
this work, but a contrary danger exists: that the desire to retrieve Smith for the
18th century, and also to trace in retrospect the whole outline
of
the system
of
thought which Smith himself was never able to complete, will make him
too
much at home in his own time.
For
no matter how one-sided it was the old view
was not entirely wrong-headed. Smith does indeed deserve the title of Father
of
Economics, however ambivalent
a
father he may have been.
Smith stands between modern economics and 18th century political
economy. He was first engineer
of
the great gulf separating them, yet he also
bridges that gulf.
To
understand Smith we need to see him in this double role.
’
If we do see him in this way, then he can help
us
in continuing to think about
basic issues in economic theory which might otherwise be in danger
of
seeming
settled. The issue on which
I
wish
to
focus in this paper is that
of
the individual
in economic theory, and what must become
of
the individual for economic
theory to realize its dream and become economic science. It would be
a
grave
mistake for economists to imagine that they have no more work to do on this
question.
Individuals in the
Wealth
of
Nations
consider their own self-interest, they are
not led to any concern for others. Yet they do depend on each other, the
interest
of
one can only be achieved by engaging the interest
of
another. They
are reciprocating monads, each self-contained in purpose, but dependent on
others for the realization
of
that purpose. Smith insists on this (at least in the
early chapters) apparently without ambivalence, but it is
a
very different state
of
affairs to that found in
The Theory
of
Moral Sentiments.
If we compare
the two we discover the exigencies, for Smith,
of
doing-using the phrase
I
I
have given a more general account
of
this in Urquhart
(1993).
*
University
of
Denver
394
RECIPROCATING MONADS
3
95
anachronistically-economic theory. Especially, we see what Smith was forced
to in order to carry through his polemic against the political economy both
of
Steuart and
of
the Physiocrats.
What
The Wealth
of
Nations
does to individuals is nothing to what neo-
classical economics does to them, however. And it is in neoclassical theory that
the full demands
of
science, only foreshadowed in Smith, become clearly vis-
ible. Looking first back and then forward from
The Wealth
of
Nations
will
show us the trajectory
of
the search for economic science in the treatment of
the individual, which must be its core.
So
I will begin with the account
of
indi-
viduals in
The Wealth
of
Nations.
I
will then turn to
The Theory
of
Moral
Sentiments
so
as to show the distance Smith had to travel to reach the former.
Finally,
I
will consider the individual in neoclassical theory in the light of
The
Wealth
of
Nations,
in order to show by how much even Smith’s later position
fell short
of
the extremes required by science.
11
INDIVIDUALS IN
THE WEALTH
OF
NATIONS
The place in which Smith most clearly indicates what his conception of the indi-
vidual is, at least insofar as
The Wealth
of
Nations
is concerned is chapter two
of
Book
I.
The chapter is brief, and the conception is by no means entirely
clear, nor is
it
one to which Smith holds consistently and unambiguously even
in
this work. Nonetheless, it is the clearest account he offers.
The subject
of
the first chapter
of
The Wealth
of
Nations
is the division
of
labour, but what is crucial is the way in which that subject is presented. First,
the division
of
labour is considered in purely technical terms-those
of
the
claim that it is the principal cause
of
increases in the productive powers
of
labour. Second, it is considered in its fully developed form, and without refer-
ence to its origins, causes, or development. (Contrasts with the developed div-
ision of labour are made by hypothetical cases
of
its absence.) Third, in this
presentation, individuals are considered only in their technical contributions:
we learn that their dexterity increases, and that they can no longer saunter, but
these points are
of
interest only because they help to account for the increase
in productive power due to the division
of
labour itself. This technical account
ends with the wonderful, and deeply impressive, example
of
the humble
woollen coat and the enormous complexity of the system-flung worldwide,
and requiring the participation
of
countless individuals in almost every ima-
ginable trade-by which it comes into the day labourer’s possession.
It is the second chapter which takes up the question of origins, and in
so
doing tells us
of
individuals and
of
at least a part
of
their natures. But the force
of
the argument depends on the astonishing picture already shown to us
of
the
division
of
labour in full swing. Thus the account
of
individuals is determined
and contained by the technical concerns
of
the first chapter. Chapter two begins
with Smith’s fundamental claim: the economic system
of
which the division of
labour
is
the core is not the intentional result
of
human wisdom, but is instead
the long and slow working out of
a
propensity in human nature. The pro-
pensity-to exchange-is either an original feature
of
human nature, or, ‘as
0
Scotlish
Economic
Socieiy
1994
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